Energy Prices May Jump 24% in 2026 as Middle East Conflict Sparks Supply Shock

Global energy prices could surge 24 percent in 2026, reaching their highest level since the 2022 energy crisis, as escalating tensions in the Middle East disrupt supply chains and unsettle commodity markets, the World Bank has warned.

According to the report, overall commodity prices are projected to increase by 16 percent this year, driven by rising costs of energy, fertilizers, and industrial metals. Brent crude prices have already climbed more than 50 percent since the start of the year, reflecting supply concerns linked to geopolitical risks.

The World Bank expects Brent crude to average $86 per barrel in 2026, compared to $69 in 2025. A major factor behind the increase is disruption in the Strait of Hormuz, a critical shipping corridor responsible for around 35 percent of global seaborne crude oil trade.

The report estimates the conflict has reduced global oil supply by nearly 10 million barrels per day, marking one of the largest supply shocks in recent history. In response, fertilizer prices are forecast to rise 31 percent, including a sharp 60 percent jump in urea prices, intensifying concerns over food production and agricultural costs.

Higher fertilizer prices could reduce crop yields and push up to 45 million additional people into food insecurity, the report warned.

Industrial metals, including copper, aluminum, and tin, are also expected to hit record highs, supported by strong demand from renewable energy projects, electric vehicles, and expanding data center infrastructure. Meanwhile, precious metals are projected to rise 42 percent as investors seek safe-haven assets during heightened uncertainty.

The World Bank cautioned that the commodity shock could fuel inflation and slow growth, particularly in developing economies. Inflation across developing countries is now forecast at 5.1 percent in 2026, while economic growth is expected to ease to 3.6 percent.

The report also warned that if geopolitical tensions worsen further, oil prices could spike to as high as $115 per barrel, amplifying inflationary pressures globally.

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