The World Bank Group’s latest Commodity Markets Outlook projects a sharp rise in global energy prices due to the ongoing conflict in the Middle East. Energy prices are expected to increase by 24% in 2026, reaching their highest level since the 2022 Russia–Ukraine war, while overall commodity prices are forecast to rise by 16% due to higher costs of energy, fertilizers, and key metals.
The report highlights severe disruptions in global oil supply, including attacks on energy infrastructure and shipping routes in the Strait of Hormuz, which handles around 35% of global seaborne crude oil trade. These disruptions have triggered a major supply shock, temporarily reducing global oil supply significantly and pushing Brent crude prices well above earlier levels, with forecasts averaging $86 per barrel in 2026.
Rising energy costs are expected to have wide-ranging economic consequences, including higher inflation, weaker growth, and increased financial pressure on developing economies. The report warns that inflation in developing countries could rise above previous expectations, while growth is likely to slow as higher prices reduce household incomes and export performance in affected regions.
Fertilizer and food markets are also expected to face strong pressure, with fertilizer prices projected to rise sharply and affordability reaching its worst level since 2022. This could negatively affect agricultural output and increase food insecurity, potentially pushing millions of people into acute hunger if the conflict continues.
Metals and safe-haven assets are also experiencing significant price increases, with base metals such as copper and aluminum reaching record levels due to strong industrial demand, and precious metals rising amid geopolitical uncertainty. These trends reflect broader disruptions across global commodity markets.
The report also notes that geopolitical shocks amplify market volatility and can have long-lasting spillover effects across energy, food, and fertilizer markets. Experts warn that governments should focus on targeted support for vulnerable populations rather than broad subsidies, as continued instability could further worsen inflation, debt burdens, and development outcomes in low- and middle-income countries.
