Energy prices are projected to surge by 23.6% in 2026, marking the highest increase since the onset of the Ukraine war. This rise is directly attributed to the ongoing conflict in the Middle East, according to a new report from the World Bank.
The report predicts that shipping disruptions will peak in May. As transit through the Strait of Hormuz stabilizes later in the year, Brent crude prices are expected to average $86 per barrel, up significantly from $69 in 2025.
Rising energy costs will heavily impact the fertilizer market, with prices forecast to climb by 31%. Urea prices could spike by 60%, threatening global agricultural yields and potentially pushing 45 million more people into acute food insecurity.
Meanwhile, demand from data centers, electric vehicles, and renewable energy is driving basic metal prices to historic highs. Metals such as aluminum, copper, and tin are expected to rise by an average of 42% throughout this year.
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Overall commodity costs will increase by 15.5% in 2026. Consequently, developing economies are projected to face an average inflation rate of 5.1%, which is significantly higher than pre-war forecasts and the previous year’s 4.7%.
If the conflict escalates or the Strait of Hormuz remains restricted, Brent prices could soar between $95 and $115. This scenario would likely push inflation in developing nations toward 5.8%, mirroring the instability seen in 2022.
World Bank chief economist Indermit Gill warned that war impacts the global economy in cumulative waves. He noted that the poor will suffer most as food and fuel costs drive up debt and interest rates in already burdened nations.
