The World Bank has published its latest Commodity Markets Outlook, projecting that the war in the Middle East will push energy prices up 24% in 2026, to their highest level since Russia’s invasion of Ukraine in 2022, and lift overall commodity prices 16%. The report attributes the shock to attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles about 35% of global seaborne crude oil trade and has seen an initial reduction in global oil supply of about 10 million barrels per day. It warns that the resulting rise in energy, food and input costs will add to inflation and weaken growth, especially in developing economies. Under the baseline assumptions, Brent crude is forecast to average USD 86 a barrel in 2026, up from USD 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. Fertilizer prices are projected to rise 31%, including a 60% jump in urea, leaving affordability at its worst level since 2022. Inflation in developing economies is now projected at 5.1% in 2026, a full percentage point above the pre-war expectation, while growth is revised down 0.4 percentage point since January to 3.6%. The World Bank estimates that 70% of commodity importers and more than 60% of commodity exporters could see weaker growth than projected in January. If hostilities escalate or supply disruptions last longer, Brent could average USD 115 a barrel, inflation in developing economies could reach 5.8%, and up to 45 million more people could fall into acute food insecurity this year.

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