Energy Prices to Hit Seven-Year High, World Bank Says
The institution's latest Commodity Markets Outlook report projected overall commodity prices to climb 16% in 2026, propelled by surging energy and fertilizer costs alongside record-breaking prices for several critical metals.
Strikes on energy infrastructure and mounting shipping disruptions across the Strait of Hormuz — a chokepoint accounting for 35% of all global seaborne crude oil trade — have triggered the largest oil supply shock ever recorded, slashing worldwide oil output by an initial 10 million barrels per day, the report stated.
The World Bank forecast Brent crude to average $86 per barrel in 2026, up sharply from $69 in 2025, under the assumption that the most severe disruptions subside by May and that tanker traffic through the Strait of Hormuz gradually normalizes by late 2026.
Fertilizer Prices Forecast to Jump 31%
The human cost of the crisis drew stark warnings from the bank's top economists. "The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive," said Indermit Gill, the World Bank Group's chief economist and senior vice president for Development Economics.
Gill stressed that the poorest populations and debt-laden developing nations would absorb the heaviest blows.
Fertilizer prices are projected to surge 31% in 2026, fueled by a 60% leap in urea prices alone, while fertilizer affordability is expected to deteriorate to its worst level since 2022 — a trend that threatens farmers' livelihoods and future harvests. The report further cautioned, citing the World Food Program, that a prolonged conflict could push as many as 45 million additional people into acute food insecurity this year.
Prices for base metals — including aluminum, copper and tin — are expected to set all-time records, while precious metals are forecast to surge 42% on average as investors seek refuge in safe-haven assets amid deepening geopolitical uncertainty.
Developing Economies Face Inflation Surge
The World Bank cautioned that the commodity price spiral will stoke inflation and erode economic growth across the globe. Inflation in developing economies is projected to average 5.1% in 2026, a full percentage point above pre-war forecasts, while growth in those same economies is expected at 3.6% — a downward revision of 0.4 percentage points since January.
The report raised the alarm that Brent crude could climb as high as $115 per barrel in 2026 should hostilities intensify, key oil and gas installations sustain further damage, and export volumes prove slow to recover.
"The succession of shocks over the decade has sharply reduced the fiscal space available to respond to the current historic energy supply crisis," said Ayhan Kose, the World Bank's deputy chief economist and director of the Prospects Group.
Kose urged policymakers to steer clear of sweeping, untargeted fiscal interventions, calling instead for swift and time-limited support directed specifically at the most vulnerable households.
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