ISTANBUL, April 29 (Bernama-Anadolu) -- Energy prices are projected to surge by 24 per cent this year to their highest level since Russia’s invasion of Ukraine in 2022, as the war in West Asia shocks global commodity markets, the World Bank Group said Tuesday.
In its latest Commodity Markets Outlook report, the bank forecast overall commodity prices to rise by 16 per cent in 2026, driven by higher energy and fertiliser prices and record highs for several key metals, Anadolu Ajansi reported.
Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles 35 per cent of global seaborne crude oil trade, have triggered one of the largest oil supply shocks on record, initially cutting global oil supply by 10 million barrels per day, the report said.
The World Bank expects Brent crude to average US$86 per barrel in 2026, up from US$69 in 2025, assuming the most acute disruptions end in May and shipping through the Strait of Hormuz 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, 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.
He said the poorest people and developing economies, already struggling under heavy debt burdens, would be hit hardest.
Fertiliser prices are projected to increase by 31 per cent in 2026, driven by a 60 per cent jump in urea prices, while fertiliser affordability is expected to fall to its worst level since 2022, threatening farmers’ incomes and future crop yields.
The report also said a prolonged conflict could push up to 45 million more people into acute food insecurity this year, citing the World Food Programme.
Prices for base metals, including aluminium, copper and tin, are expected to reach all-time highs, while precious metals are forecast to rise by 42 per cent on average as geopolitical uncertainty drives demand for safe-haven assets.
The World Bank said higher commodity prices will increase inflation and weaken growth worldwide.
Inflation in developing economies is projected to average 5.1 per cent in 2026, one percentage point higher than expected before the war, while growth is forecast at 3.6 per cent, a downward revision of 0.4 percentage points since January.
The report warned that Brent crude could average as high as US$115 per barrel in 2026 if hostilities escalate, critical oil and gas facilities suffer more damage and export volumes recover slowly.
“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.
He urged governments to avoid broad, untargeted fiscal support measures and focus on rapid, temporary support for the most vulnerable households.
-- BERNAMA-ANADOLU
