World Bank forecasts energy prices to surge 24% in 2026
WASHINGTON — World Bank projects global energy prices will surge 24% this year as a result of the Middle East conflict, even if the most severe disruptions end by May 2026.
As reported by Reuters, the increase is expected to push energy prices to their highest levels since Russia’s invasion of Ukraine four years ago.
In its latest Commodity Markets Outlook report released on Tuesday (28/4), World Bank said commodity prices could rise even further if the conflict in the Middle East escalates and supply disruptions persist longer than expected.
The bank’s baseline scenario assumes that shipping volumes through the Strait of Hormuz—a vital artery for global energy trade—will return close to pre-war levels by October 2026.
However, the lender warned that risks remain skewed towards sharper price increases.
Overall, World Bank forecasts commodity prices to rise 16% in 2026, driven by surging energy and fertiliser prices as well as record highs in several key metals.
Oil prices have continued to climb as US-Iran peace efforts remain deadlocked, while energy shipping routes through the Strait of Hormuz continue to face disruptions.
This situation is seen as constraining the supply of energy, fertilisers, and other commodities from major Middle Eastern producers to global markets.
Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz—previously accounting for 35% of global seaborne crude oil trade—have triggered what World Bank described as the largest oil supply shock on record.
Brent crude prices were more than 50% higher in mid-April compared with the start of the year.
The World Bank expects Brent to average USD 86 per barrel in 2026, up sharply from USD 69 per barrel in 2025.
Prices could even exceed USD 115 per barrel if key oil and gas facilities sustain further damage and export recovery is delayed.
Chief Economist Indermit Gill said the war is hitting the global economy in multiple waves: starting with higher energy prices, followed by rising food costs, and then inflation that pushes interest rates higher and makes debt more expensive.
He added that poorer countries would be hardest hit, particularly developing economies with high debt burdens.
Meanwhile, fertiliser prices are projected to rise 31% in 2026, led by a 60% increase in urea prices, the most widely used nitrogen-based fertiliser.
This is expected to strain global food supply, erode farmers’ incomes, and threaten future crop yields.
World Food Programme (WFP) estimates that an additional 45 million people could face acute food insecurity this year if the war persists over a prolonged period.
Inflation in developing countries is projected to average 5.1% in 2026, up from 4.7% last year and one percentage point higher than pre-war forecasts.
If the conflict drags on, the World Bank estimates inflation could rise further to 5.8%.
Meanwhile, economic growth in developing countries is expected to slow to just 3.6% in 2026, down from a pre-war estimate of 4%. (DK/KR/ZH)
