WASHINGTON, April 28 (Reuters) – Energy prices are expected to rise 24% in 2026, reaching the highest level since Russia’s full-scale invasion of Ukraine four years ago, if the most serious disruptions caused by war in the Middle East end in May, the World Bank said on Tuesday.
Commodity prices could rise further if hostilities in the region escalate and supply disruptions last longer than expected, the Global Development Bank said in the latest edition of its Commodity Market Outlook report.
The bank said its baseline scenario assumes shipping volumes through the crucial Strait of Hormuz waterway will gradually return to near pre-war levels by October, but said risks are ‘steeply tilted’ towards higher prices.
The bank’s base case projects a 16% increase in overall commodity prices in 2026, driven by rising energy and fertilizer prices and record prices for several key metals.
Oil prices continued to rise on Tuesday as efforts to end the United States and Israel’s war against Iran stalled and the Strait of Hormuz remained largely closed, keeping supplies of energy, fertilizer and other commodities from the Middle East’s main producing region out of reach of global buyers.
Attacks on energy infrastructure and disruptions to shipping in the strait, which before the war carried 35% of global maritime crude oil trade, triggered the biggest oil supply shock on record, the World Bank said.
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According to the World Bank, Brent crude oil prices remained more than 50% higher in mid-April than at the beginning of the year. Brent crude is forecast to average $86 per barrel in 2026, a sharp increase from $69 per barrel in 2025, the bank said.
Brent crude prices could average $115 per barrel this year if critical oil and gas facilities suffer further war damage and if export volumes 🏽 are slow to recover, the bank said.
Brent crude futures for June were trading around US$109 per barrel on Tuesday, after reaching their highest value since April 7 on Monday.
“War is hitting the global economy in cumulative waves: first through rising energy prices, then through rising food prices, and finally through rising inflation, which will drive up interest rates and make debt even more expensive,” said World Bank chief economist Indermit Gill. The shock would hit the poorest hardest, increasing the problems of highly indebted developing countries.
Pressure on food
Fertilizer prices were projected to rise 31% in 2026, driven by a 60% jump in the price of urea, the most widely used solid nitrogen fertilizer, which is produced by converting natural gas to produce ammonia and carbon dioxide.
Rising fertilizer prices will fuel pressures on food supplies, eroding farmers’ incomes and threatening future crop productivity. The World Food Program estimates that an additional 45 million people could face acute food insecurity this year if the war continues for a prolonged period.
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The World Bank reported that inflation in developing economies was projected to reach an average of 5.1% in 2026, according to the reference scenario, up from 4.7% recorded last year and one percentage point above pre-war forecasts. However, inflation could reach 5.8% in developing economies if the war is prolonged.
Growth will also suffer a major impact, according to the bank. Developing economies are now projected to grow just 3.6% in 2026, below the 4% growth forecast made before the war.
