World Bank sees 24% surge in energy prices in 2026
Investing.com -- Energy prices are projected to jump 24% in 2026—the highest since Russia’s 2022 invasion of Ukraine—if the worst Middle East war disruptions end by May, according to the World Bank.
Commodity prices could climb even higher if the conflict escalates or supply disruptions last longer, the bank warned in its Commodity Markets Outlook.
The bank’s baseline assumes shipping through the Strait of Hormuz will return to near pre-war levels by October, but notes that risks remain heavily tilted toward higher prices.
The baseline also projects a 16% rise in overall commodity prices next year, driven by energy, fertilizer, and record-high metals prices.
"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," World Bank chief economist Indermit Gill said. The shock would hit the poorest hardest, adding to the woes of highly indebted developing countries.
Oil prices rose further Tuesday as the U.S.-Iran war dragged on and the Strait of Hormuz stayed mostly closed, restricting global access to energy, fertilizer, and other Middle East commodities.
Attacks on energy infrastructure and disruptions in the strait—which previously carried 35% of global seaborne crude—have caused the largest recorded oil supply shock, the World Bank said.
Brent crude prices were over 50% higher in mid-April than at the year’s start. The bank forecasts Brent to average $86 a barrel in 2026, up from $69 in 2025.
Brent could average as much as $115 if war damages worsen and exports recover slowly, the bank said.
Brent futures for June traded near $109 on Tuesday, after hitting a recent high on Monday.