This policy brief assesses the global development impact of the military escalation in the Middle East. Modeling the global economic and inflationary impacts of three conflict-intensity scenarios, the brief estimates the number of people pushed into poverty and the fiscal cost of mitigating the impact. Even marginal increases in conflict intensity produce large additional poverty impacts and fiscal mitigation costs. Furthermore, the brief considers how countries can best design their policy response under varying degrees of vulnerability to the shock. While advanced economies have more policy space to mitigate the socio-economic impacts of the global energy supply shock, many developing countries are highly restricted in their ability to respond with potentially severe consequences for both immediate and longer-term development objectives.