Middle East war to spark biggest energy price surge in four years
Overall commodity prices are forecast to rise by 16 percent in 2026, driven by soaring energy and fertilizer costs, alongside record-high prices for several key metals
WASHINGTON, April 28, 2026 — Global energy prices are projected to surge by 24 percent this year, reaching their highest level since Russia’s 2022 invasion of Ukraine, as the war in the Middle East sends shockwaves through commodity markets, according to the World Bank Group’s latest Commodity Markets Outlook.
Overall commodity prices are forecast to rise by 16 percent in 2026, driven by soaring energy and fertilizer costs, alongside record-high prices for several key metals.
The report warns that the shock will have serious consequences for job creation and economic development, particularly in vulnerable economies.
Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz — which handles about 35 percent of global seaborne crude oil trade — have triggered what the report describes as the largest oil supply shock on record. Global oil supply initially fell by around 10 million barrels per day.
Although prices have eased slightly from recent peaks, Brent crude remained more than 50 percent higher in mid-April than at the start of the year. It is forecast to average US$ 86 per barrel in 2026, up sharply from US$ 69 in 2025. These projections assume that the most severe disruptions subside by May and that shipping through the Strait gradually returns to pre-war levels by late 2026.
“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally higher inflation,” said Indermit Gill, Chief Economist of the World Bank Group. “The poorest people — who spend the largest share of their income on food and fuel — will be hit the hardest. War is development in reverse.”
Fertilizer prices are expected to climb by 31 percent in 2026, driven by a 60 percent spike in urea prices. Affordability is set to fall to its worst level since 2022, threatening farm incomes and future crop yields.
If the conflict drags on, the World Food Programme warns that up to 45 million more people could fall into acute food insecurity this year.
Prices for base metals — including aluminum, copper, and tin — are also projected to hit record highs, fueled by demand from industries such as data centres, electric vehicles, and renewable energy. Meanwhile, precious metals are expected to rise by 42 percent in 2026, as investors seek safe-haven assets amid geopolitical uncertainty.
Rising commodity prices are expected to push inflation higher and slow global growth. In developing economies, inflation is projected to average 5.1 percent in 2026 — up from 4.7 percent last year and one percentage point higher than pre-war forecasts.
Economic growth in these countries is also expected to weaken, with output projected at 3.6 percent in 2026 — a downward revision of 0.4 percentage points since January. Economies directly affected by conflict will bear the brunt, while 70 percent of commodity-importing countries and more than 60 percent of exporters could see weaker-than-expected growth.
The report warns that prices could climb even further if hostilities intensify or disruptions persist. In a worst-case scenario, Brent crude could average as much as US$ 115 per barrel in 2026, with knock-on effects for fertilizers and alternative energy sources such as biofuels.
Under this scenario, inflation in developing economies could rise to 5.8 percent — a level exceeded only once in the past decade, during 2022.
“A decade of repeated shocks has significantly reduced governments’ fiscal space,” said Ayhan Kose, Deputy Chief Economist at the World Bank. “Instead of broad subsidies, policymakers should focus on targeted, temporary support for the most vulnerable households.”
The report also highlights that oil price volatility during periods of geopolitical tension is roughly twice as high as during stable periods. A 1 percent drop in oil production due to geopolitical factors can drive prices up by an average of 11.5 percent.
These shocks spill over into other markets, amplifying their impact. A 10 percent increase in oil prices can lead to natural gas prices rising by about 7 percent and fertiliser prices by more than 5 percent, typically peaking about a year after the initial shock — with serious consequences for food security and poverty reduction.
Buy your copy of theCooperator magazine from one of our countrywide vending points or an e-copy on emag.thecooperator.news
