World Bank Predicts Energy Prices to Soar 24 Percent

(MENAFN) The World Bank sounded a sweeping alarm Tuesday, projecting that energy prices could spike 24 percent in 2026 — reaching their loftiest levels since the outbreak of the Russia-Ukraine conflict four years ago — as the Middle East war unleashes an unprecedented shock across global commodity markets. Overall commodity prices are forecast to rise 16 percent.

In its latest Commodity Markets Outlook, the World Bank pointed to a twin disruption fueling the crisis: targeted strikes on energy infrastructure and severe shipping bottlenecks at the Strait of Hormuz — the critical maritime artery handling roughly 35 percent of the world's seaborne crude oil trade. Together, these factors have triggered what the institution described as the largest oil supply shock ever recorded, with an estimated initial reduction in global oil supply of approximately 10 million barrels per day.

The ripple effects extend well beyond crude. Fertilizer prices are projected to climb 31 percent in 2026, supercharged by a staggering 60 percent surge in urea costs alone. Base metals — including aluminum, copper, and tin — are expected to hit all-time price highs, while precious metals are forecast to advance 42 percent as deepening geopolitical uncertainty drives investors toward safe-haven assets.

The World Bank cautioned that these projections carry significant upside risk. Should hostilities intensify or supply disruptions outlast current assumptions, commodity prices could escalate well beyond current forecasts.

Indermit Gill, the World Bank Group's chief economist and senior vice president for Development Economics, underscored the cascading nature of the crisis and its most vulnerable victims: "The war is hitting the global economy in cumulative waves," warning that poorer populations will bear the heaviest burden of the unfolding shock.

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