{"id":924647,"date":"2026-04-28T18:50:20","date_gmt":"2026-04-28T18:50:20","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/924647\/"},"modified":"2026-04-28T18:50:20","modified_gmt":"2026-04-28T18:50:20","slug":"middle-east-war-to-spark-biggest-energy-price-surge-in-four-years","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/924647\/","title":{"rendered":"Middle East War to Spark Biggest Energy Price Surge in Four Years"},"content":{"rendered":"

Commodity\u00a0prices forecast to rise by 16% this year, fueling inflation\u00a0and\u00a0slowing growth<\/strong><\/p>\n

WASHINGTON,\u00a0April 28, 2026<\/strong>\u2014Energy prices\u00a0are\u00a0projected to surge\u00a0by\u00a024% this year to their highest level\u00a0since Russia\u2019s invasion of Ukraine in 2022,\u00a0as the war in the Middle East sends a severe shock through global commodity markets<\/a>,\u00a0according to the World Bank\u00a0Group’s latest\u00a0Commodity Markets Outlook. Overall commodity prices\u00a0are forecast to rise 16% in 2026,\u00a0driven by\u00a0soaring\u00a0energy and fertilizer prices and record-high prices for\u00a0several\u00a0key metals.<\/a><\/p>\n

The shock will have serious implications for job creation and development, the analysis\u00a0indicates.\u00a0<\/p>\n

Attacks on energy infrastructure and shipping disruptions in the Strait\u00a0of Hormuz, which handles\u00a0about 35% of global seaborne crude\u00a0oil trade, have\u00a0triggered the largest oil supply shock on record, with\u00a0an initial\u00a0reduction in global oil supply of about 10 million barrels per day. Even after moderating from their recent peak,\u00a0Brent oil prices\u00a0remained more than\u00a050% higher\u00a0in\u00a0mid-April\u00a0than they were at the start of the year. Brent oil is forecast to average $86 a barrel in 2026, up sharply from $69 a barrel in 2025.\u00a0These forecasts\u00a0assume\u00a0that the most acute disruptions end in May and that shipping through the Strait of Hormuz gradually returns to pre-war levels by late\u00a02026.<\/p>\n

\u201cThe war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally,\u00a0higher inflation, which will push up interest rates and make debt even more expensive,\u201d\u00a0said\u202fIndermit\u00a0Gill,\u202fthe World Bank Group\u2019s Chief Economist and Senior Vice President for Development Economics<\/strong>.\u202f\u201cThe poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest, as will developing economies already struggling under heavy debt burdens. All of this\u00a0is a\u00a0reminder of a\u00a0stark\u00a0truth: war is development in reverse.\u201d<\/p>\n

Fertilizer prices are projected to increase by 31% in 2026, driven by a 60% jump in urea prices.\u00a0Fertilizer affordability\u00a0will fall\u00a0to its worst level since 2022, eroding farmers\u2019 incomes and threatening future crop yields.<\/a> If the conflict proves more prolonged, these pressures on food supply and affordability could push\u00a0up to\u00a045 million more people into acute food insecurity this year, according to the World Food\u00a0Programme.<\/a><\/p>\n

Prices for base metals, including aluminum, copper, and tin, are also expected to reach all-time highs,\u00a0reflecting\u00a0strong demand related to\u00a0industries including data centers, electric vehicles,\u00a0and\u00a0renewable energy.<\/a> Precious metals\u00a0continue to\u00a0break price and volatility\u00a0records, with average prices forecast to increase 42% in 2026, as\u00a0geopolitical uncertainty fuels\u00a0demand for safe-haven assets.<\/a><\/p>\n

Rising\u00a0commodity prices caused by these shocks will increase inflation and dampen growth worldwide.\u00a0In developing economies,\u00a0inflation is now\u00a0projected\u00a0to average\u00a05.1% in 2026<\/a>\u00a0under the baseline assumptions\u2014a full\u00a0percentage point higher than was expected\u00a0before\u00a0the war and an\u00a0increase from\u00a04.7%\u00a0last year.\u00a0Growth in developing economies will also deteriorate as higher prices for essentials weigh on incomes and exports from the Middle East\u00a0face\u00a0sharp curbs.\u00a0Developing economies are expected to grow by 3.6%\u00a0in 2026, a downward revision of 0.4 percentage point since January.\u00a0Economies directly\u00a0impacted\u00a0by conflict\u00a0will be hardest hit,\u00a0and\u00a070%\u00a0of commodity importers and more than 60%\u00a0of commodity exporters\u00a0worldwide\u00a0could see\u00a0weaker\u00a0growth\u00a0than\u00a0was projected in January.<\/a><\/p>\n

Commodity prices could rise even higher if hostilities escalate or supply disruptions from the war last longer than projected.<\/a> Brent oil prices could\u00a0average\u00a0as high as $115\u00a0a\u00a0barrel in 2026\u00a0in a scenario where\u00a0critical\u00a0oil and gas facilities suffer\u00a0more\u00a0damage\u00a0and\u00a0export volumes are slow to recover. This in turn would have ripple effects on prices for fertilizer and alternative energy sources\u00a0such as biofuels.\u00a0Under this scenario, inflation in developing economies could rise to\u00a05.8% this year, a level exceeded only in 2022 over the past decade.<\/p>\n

\u201cThe succession of shocks over the decade has sharply reduced the fiscal space available to respond to the current historic energy supply\u00a0crisis,\u201d\u00a0said\u00a0Ayhan Kose, the World Bank\u2019s Deputy Chief Economist and Director of the Prospects Group<\/strong>.\u00a0\u201cGovernments must resist the temptation of broad, untargeted fiscal support measures that could distort markets and erode fiscal\u00a0buffers.\u00a0Instead, they should focus on rapid, temporary\u00a0support\u00a0targeted to\u00a0the most vulnerable households.\u201d<\/p>\n

The report\u2019s\u00a0special focus\u00a0finds that oil-price volatility during periods of\u00a0rising\u00a0geopolitical risk is\u00a0roughly twice\u00a0as high as during calmer periods, with a\u00a0geopolitically driven\u00a01% decline in oil production pushing prices\u00a0up\u00a0by an average of 11.5%. <\/a>Critically, these effects spill over into other key commodity markets, with an impact\u00a0roughly 50%\u00a0larger than under normal market conditions. According to the report, a 10% oil price increase triggered by a geopolitical supply shock leads to natural gas price increases peaking at about 7% and fertilizer price increases peaking at over 5%. These\u00a0peaks typically occur about a year after the\u00a0initial\u00a0oil price shock, with adverse consequences for food security and poverty reduction.\u00a0<\/p>\n

Download the\u00a0report:<\/strong>\u00a0https:\/\/bit.ly\/CMO-April-2026<\/a><\/p>\n

Link to data and charts:<\/strong>\u00a0https:\/\/bit.ly\/CMO-April-2026-Data<\/a><\/p>\n

Website:\u00a0https:\/\/www.worldbank.org\/<\/a><\/p>\n

Facebook:\u00a0https:\/\/www.facebook.com\/worldbankgroup\/<\/a><\/p>\n

X:\u00a0https:\/\/x.com\/worldbankgroup<\/a>\u202f<\/p>\n

YouTube:\u00a0https:\/\/www.youtube.com\/@WorldBankGroup<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Commodity\u00a0prices forecast to rise by 16% this year, fueling inflation\u00a0and\u00a0slowing growth WASHINGTON,\u00a0April 28, 2026\u2014Energy prices\u00a0are\u00a0projected to surge\u00a0by\u00a024% this…\n","protected":false},"author":2,"featured_media":924648,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3090],"tags":[51,5286,1700,35,72830,2848,6084,160093,259065,259064,46,1201,16,15],"class_list":["post-924647","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economic-growth","tag-economy","tag-energy","tag-fiscal-policy","tag-global","tag-infrastructure","tag-jobs-and-development","tag-macroeconomic-and-structural-policies","tag-macroeconomics-and-fiscal-management","tag-policy","tag-trade","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116483839046496241","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/924647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=924647"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/924647\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/924648"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=924647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=924647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=924647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}