The World Bank issued a stark warning in its latest report on commodity market prospects, predicting a significant 24% jump in global energy prices during 2026. This potential surge would push prices back to their highest levels since the start of the Russian invasion of Ukraine, an event that sent shockwaves through global energy markets four years ago. The report directly links this forecast to ongoing geopolitical instability, particularly the conflict in the Middle East, noting that its baseline scenario assumes the current turmoil will end by next May.
General context and historical background
These projections come amid a period of extreme volatility in energy markets. Since 2022, the war in Ukraine has reshaped the global energy supply map, as European countries sought to reduce their dependence on Russian gas, leading to record-high prices. Today, the conflict in the Middle East adds a new layer of complexity and risk. Attacks on energy infrastructure and disruptions to shipping in the Strait of Hormuz, through which nearly 35% of the world’s seaborne crude oil trade passes, have triggered a major supply shock, causing Brent crude prices to surge by more than 50% by mid-April compared to the beginning of the year.
The importance of the event and its expected impact
Such a surge in energy prices has far-reaching economic consequences, both regionally and internationally. Globally, it will fuel inflationary pressures, forcing central banks in major economies to keep interest rates high for longer, which could slow global economic growth. For developing and oil-importing countries, the impact will be even more severe, as higher fuel and transportation costs will drive up the prices of basic commodities and food, exacerbating the cost-of-living crisis and threatening the food security of millions.
Multiple scenarios and increased risks
The World Bank explained that its baseline scenario assumes a gradual return of shipping traffic through the Strait of Hormuz to normal levels by next October. However, the report warned that the risks are clearly tilted toward higher prices. Should tensions escalate and supply disruptions persist for an extended period, the bank expects Brent crude to average $86 per barrel in 2026, up from $69 in 2025. In a more pessimistic scenario, with further damage to vital oil and gas facilities, the average price per barrel could reach $115 this year. The price increases are not limited to energy; the bank anticipates a 16% rise in overall commodity prices, driven by higher prices for fertilizers and key metals, placing additional pressure on the global economy.
