Lower crude prices since a tentative U.S.-Iran truce have helped relieve some immediate inflationary pressures in parts of the developing world, but analysts caution that cheaper oil alone will not eliminate the heightened risk of civil unrest across many emerging markets.
In recent weeks demonstrations linked to rising fuel costs and the broader increase in the cost of living have surfaced from Kenya to Indonesia and Bolivia. Global civil unrest reached a six-year high in the second quarter of 2026, according to Verisk Maplecroft, a U.K.-based risk consultancy. The firm compiles a quarterly index that tracks recorded protest events over a rolling 12-month window, assessing frequency, scale and severity.
Oil benchmarks have eased toward pre-conflict levels after an accord between Washington and Tehran reopened shipping lanes through the Strait of Hormuz, with Brent crude approaching $70 a barrel. But the fall in wholesale prices follows months of elevated energy bills that, analysts say, have already inflicted damage on household finances.
Any reduction in global commodity prices will not immediately translate into relief for consumers. Oil markets remain volatile, and the pass-through from lower international prices to retail fuel costs and household energy bills typically lags. That lag means inflationary effects stemming from disrupted shipping and damage to energy infrastructure are likely to persist, according to Torbjorn Soltvedt, head of EMEA at Verisk Maplecroft. "Inflationary pressure from the disruption to shipping and damage to energy infrastructure will continue well into the second half of 2026," he said.
Where unrest has risen most
Verisk Maplecroft’s civil unrest index shows that Iraq has experienced the largest proportional increase in protest activity among emerging markets over the past year, with Turkey following. The index evaluates not just the number of demonstrations but also their size, related fatalities and instances of commercial property damage.
India, which the index already rates as the country with the highest protest risk, has seen a notable uptick in demonstrations since the second quarter of the previous year. Several other large emerging markets have also recorded deteriorations in their risk scores: Brazil’s rating has worsened significantly, while Iran’s score has jumped sharply after widespread anti-government protests earlier this year and a subsequent crackdown.
Different fiscal room, different choices
Not all governments confront the same policy constraints. Countries with relatively stronger fiscal buffers, such as Indonesia and the Philippines, can absorb some of the shock by extending subsidies for energy or targeted relief, said Carmen Altenkirch, an emerging market sovereign analyst at Aviva Investors. By contrast, nations with weaker public finances face a stark choice: pass higher energy costs on to households and risk escalating unrest, or absorb those costs and delay fiscal consolidation.
Soltvedt at Verisk Maplecroft underlined the fiscal dimension of social risk: "Tighter public finances contribute to rising inequality and poverty, both of which are important drivers of risk." A small number of emerging economies - including Bangladesh, Pakistan, Kenya and Nigeria - have recorded modest improvements in their civil unrest risk levels over the past year, but analysts stress that all these countries remain firmly in high-risk territory.
Countries flagged for close monitoring
Looking ahead, Verisk Maplecroft identifies India, Mexico, Brazil, Argentina, Colombia and Turkey among the countries most at risk of heightened unrest. Jervin Naidoo, a political analyst at Oxford Economics, adds Ethiopia, Tanzania, Rwanda, the Democratic Republic of Congo, Nigeria and South Africa to his list of nations to watch. "Early signs of protests around fuel are something of a foreshadowing for the rest of the continent," Naidoo said.
Ratings agencies are following developments closely. Moody’s has indicated that the risk of negative sovereign rating actions will be influenced by whether government responses to energy and food price shocks materially weaken fiscal trajectories. The involvement of the International Monetary Fund can complicate decisions: the IMF has publicly urged governments to avoid broad-based subsidies, creating tension between domestic political pressures and commitments to international lenders.
"This is where you have to balance domestic politics versus what international lenders want you to do," Naidoo said. Several governments, including Kenya and Mozambique, are seeking fresh IMF programmes, a step that could shape how they respond to the political fallout from higher consumer prices.
Bond investors, according to Nicholas Sauer at Robeco, are likely to be more accommodating of fiscal measures that are temporary and tightly targeted. Debate remains about the overall direction of policy on fuel subsidies: some observers argue that reforms are moving in the right direction. "If you compare today’s subsidies with 2022, there is a very clear trend of fuel subsidy reduction," said Carlos de Sousa at Vontobel. Nevertheless, the ceasefire underpinning recent price drops is fragile, and analysts warn that public pressure could quickly rebuild if market or geopolitical conditions change.