Full Breakdown
World Bank Forecasts 24% Energy Price Surge in 2026 Amid Middle East Conflict
4/29/2026, 11:59:41 AM
Projected Energy Price Surge
The World Bank’s Commodity Markets Outlook projects a 24 % rise in energy prices in 2026. Assuming the Strait of Hormuz returns to shipping by October, Brent crude is expected to average $86 per barrel, up from $69 in 2025. A severe-supply-shock scenario could raise average to $115 per barrel.
Background & Context
The price surge stems from attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles 35 % of seaborne crude oil. The disruptions follow an escalation of hostilities in the Middle East since early 2024 and have produced the largest oil-supply shock on record, cutting output by about 10 million barrels per day.
Data & Statistics
- Energy prices: +24 % (2026); overall commodity prices: +16 % (2026)
- Fertilizer (incl. urea) prices: +31 % (2026) with urea up 60 %
- Brent crude: $86 / bbl baseline, $115 / bbl severe scenario
- Developing economies: inflation 5.1 % (up to 5.8 % if conflict persists); growth 3.6 % (2026) vs. 4 %; food insecurity: 45 million people; oil supply reduction ~10 million barrels per day
Official Statements & Responses
The World Bank stresses that the risk profile is tilted toward higher prices. It warns that rising energy, food and inflation will push interest rates up and increase debt burdens for developing nations. The bank calls on governments to prioritize support for vulnerable households as commodity shocks threaten stability and job creation.
Why It Matters
Higher energy costs raise production expenses, feeding food-price inflation and eroding real incomes. Fertilizer price spikes threaten farmer profitability and could depress crop yields. Combined with slower growth, inflationary pressure may deepen debt distress in low-income economies, amplifying poverty risks.
Conflicting Reports & Gaps
The outlook presents baseline and severe-supply-shock scenarios, reflecting uncertainty over Middle-East hostilities and the pace of maritime recovery. Verification of the 10 million-barrel supply loss is lacking, leaving a gap in quantifying the shock’s exact magnitude.
Verbatim Quotes
- “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 drive up interest rates and make debt even more expensive,” — Indermit Gill, World Bank Group Chief Economist
- “The poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest.” — Indermit Gill, World Bank Group Chief Economist
- “According to the World Bank, attacks on energy infrastructure and disruptions to shipping in the strait - which before the war accounted for 35% of global seaborne crude oil trade - have triggered the largest oil supply shock on record.” — Indermit Gill, World Bank Group Chief Economist
What's Next
The World Bank will track the Middle-East conflict and revise its forecasts. It advises policymakers to design assistance for low-income households and to consider measures that can temper inflationary spillovers while commodity markets stabilize.
