The World Bank Group warns the conflict in West Asia may trigger the steepest jump in energy prices seen in four years, with knock-on effects across commodity markets, inflation and global growth. In its Commodity Markets Outlook, the Bank forecasts energy prices to climb about 24% in 2026, lifting overall commodity prices roughly 16%, led by energy, fertilisers and metals.
The report points to a sharp oil supply shock driven by attacks on energy infrastructure and disruption to shipping through the Strait of Hormuz, which handles about 35% of global seaborne crude. Global oil supply has already suffered an initial hit of nearly 10 million barrels per day, and benchmark Brent traded more than 50% higher in mid-April than at the start of the year.
Assuming disruptions begin to ease by mid-2026 and shipping returns to normal by late 2026, the World Bank expects Brent to average about $86 per barrel in 2026, up from $69 in 2025. But risks are tilted to the upside: if damage to key oil and gas facilities continues, Brent could average as much as $115 per barrel.
Fertiliser markets are set for a sharp increase—prices are forecast to jump about 31%, with urea rising roughly 60%—threatening affordability to levels last seen in 2022. The World Food Programme cautions that a prolonged conflict could push as many as 45 million more people into acute food insecurity. Metals are also under pressure: base metals such as aluminium, copper and tin could hit record highs as demand from data centres, electric vehicles and renewable energy grows, while precious metals could gain around 42% amid greater geopolitical uncertainty.
Macro implications are mounting. Inflation in developing economies is projected at 5.1% in 2026—about one percentage point higher than pre-conflict forecasts—while growth projections have been trimmed to 3.6%, a 40 basis-point downgrade since January. Nearly 70% of commodity-importing countries and more than 60% of exporters are now likely to experience weaker growth than previously expected.
“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, noting the poorest households and heavily indebted developing countries will suffer most. The report also highlights that oil-price reactions to geopolitical shocks are intense—about twice as large as normal: a 1% supply drop can lift prices by over 11%, natural gas can rise up to 7%, and fertiliser prices often increase more than 5% with roughly a one-year lag.
With fiscal space limited after a decade of shocks, World Bank officials urge against broad, untargeted subsidies that could skew markets and deplete buffers. “Governments should prioritize rapid, temporary support targeted to the most vulnerable rather than wide-ranging fiscal measures,” said Ayhan Kose, warning that stretched public finances constrain policymakers’ ability to respond.