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The World Bank Group’s latest Commodity Markets Outlook warns that energy prices will rise by 24% in 2026, reaching their highest level since Russia’s invasion of Ukraine in 2022.
According to the analysis, the war in the Middle East has caused one of the biggest shocks to global energy markets, mainly due to attacks on oil infrastructure and disruptions to shipping through the Strait of Hormuz, one of the most important routes for global oil trade.
Approximately 35% of the world’s seaborne crude oil trade passes through this waterway, so any disruption in this area has an immediate impact on international fuel prices.
The report indicates that this situation has triggered the biggest oil supply crisis on record, with an initial estimated reduction of around US$10 million barrels per day in global supply.
As a result, even after moderating from their peak levels reached in mid-april, Brent crude oil prices remained more than 50% higher than at the beginning of the year.
The World Bank currently projects that Brent crude will average US$86 per barrel in 2026, considerably higher than the US$69 per barrel reported in 2025. These projections assume that the most severe disruptions will end in May and that, by the end of 2026, shipping through the Strait of Hormuz will gradually return to pre-conflict levels.
However, if hostilities escalate or damage to oil and gas facilities continues, the situation could worsen. In that case, the average Brent price could climb to US$115 per barrel this year. The World Bank’s chief economist and senior vice president for Development Economics, Indermit Gill, explained that the war is affecting the global economy in several stages.
First, with rising energy prices; then, with increased food costs; and finally, with higher inflation that forces higher interest rates and makes borrowing even more expensive for countries.
According to Gill, the most vulnerable populations will be the hardest hit, especially families that spend a large portion of their income on food, transportation, and fuel.
Furthermore, developing economies face greater risks, as many of them depend on energy imports and already carry high levels of public debt.
The report also highlights that rising energy costs have a ripple effect on other strategic sectors. One of the hardest hit will be fertilizers, whose prices are projected to rise by 31% in 2026, driven primarily by a 60% increase in the price of urea.
This will directly impact farmers, reduce the profitability of agricultural production, and could compromise future harvest yields, further increasing pressure on food prices. The World Bank also projects that average inflation in developing economies will reach 5.1% in 2026, one percentage point higher than projected before the conflict and above the 4.7% recorded the previous year.
Economic growth will also deteriorate. Developing economies are expected to grow by only 3.6%, a downward revision of 0.4 percentage points compared to projections made in january.
World Bank Deputy Chief Economist Ayhan Kose warned that governments must act prudently in the face of this crisis.
He indicated that broad and generalized subsidies, which could further weaken public finances, are not recommended. Instead, temporary and targeted support should be implemented for the most vulnerable households.
The report concludes that oil price volatility during geopolitical crises is approximately twice as high as during periods of stability, and that a 1% drop in oil production due to geopolitical reasons can raise prices by an average of 11.5%.
Furthermore, a 10% increase in the price of oil could boost the price of natural gas by up to 7% and the price of fertilizers by more than 5%, exacerbating the effects on food security and poverty reduction.
For the World Bank, this new energy crisis represents one of the major global economic challenges of 2026, with effects that could extend beyond the short term if the conflict in the Middle East is not stabilized.
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