The World Bank's 'Commodity Markets Outlook' report predicts a 24% increase in energy prices by 2026, the highest since Russia's invasion of Ukraine in 2022. Experts attribute this to the severe shock of the Middle East war on global commodity markets.
According to the forecast, overall commodity prices will rise 16% in 2026, driven by sharp increases in energy and fertilizers, as well as record highs for several base metals. The World Bank analysis indicates this shock will have serious implications for job creation and development.
Analysts note that attacks on energy infrastructure in the Strait of Hormuz, through which about 35% of global seaborne crude oil trade passes, and shipping disruptions caused the largest supply shock in history. This initially cut global supply by about 10 million barrels per day. Brent crude prices in mid-April remained more than 50% higher than at the start of the year.
Brent crude is projected to average $86 per barrel in 2026, up from $69 in 2025. The forecasts assume the most severe disruptions end by May and shipping through the Strait of Hormuz gradually returns to pre-war levels by end-2026.
Indermit Gill, Chief Economist of the World Bank Group, stated that the war is having a cascading effect on the global economy: first through higher energy prices, then food prices, and finally inflation. This leads to higher interest rates and more expensive borrowing. The poorest populations and developing economies with heavy debt burdens are hit hardest.
Fertilizer prices are expected to rise 31% in 2026, with urea prices surging 60%. Fertilizer availability is set to fall to its lowest since 2022, reducing farmer incomes and threatening future harvests. The World Food Programme estimates that if the conflict persists, up to 45 million more people could face acute food insecurity this year.
Base metals like aluminum, copper, and tin are expected to reach historic highs. Precious metal prices are forecast to rise 42% on average in 2026. The World Bank warns that these shocks will accelerate inflation and slow economic growth. Inflation in developing economies is expected to average 5.1% in 2026.
In an escalation scenario, Brent crude could average $115 per barrel in 2026, further boosting fertilizer and biofuel prices. Under such a scenario, inflation in developing economies could rise to 5.8% this year.
Ayhan Kose, Deputy Chief Economist of the World Bank, urged governments to avoid broad, untargeted fiscal support that could disrupt market mechanisms and deplete budgets. Instead, they should focus on swift, temporary assistance for the most vulnerable households. The report notes that oil price volatility is roughly twice as high during periods of heightened geopolitical risk.
Source: www.gazeta.uz