File Photo: Pumpjacks dip their heads to extract oil in a basin south of Duchesne. Photo : AP
In its latest Commodity Markets Outlook, the World Bank (WB) projected that overall commodity prices will rise by 16 percent in 2026, driven by surging energy and fertilizer costs and record highs in several key metals.
The shock is already having “serious implications” for jobs and development, the Washington-based lender warned.
The WB described disruptions to energy infrastructure and shipping through the Strait of Hormuz, through which around 35 percent of global seaborne crude oil passes, as “an unprecedented oil supply shock.”
It noted that such a shock has initially cut global supply by about 10 million barrels per day.
Despite easing from recent peaks, Brent crude remains more than 50 percent higher in mid-April compared to the start of the year.
Prices are forecast to average $86 per barrel in 2026, up from $69 in 2025, assuming disruptions ease from May and shipping routes gradually normalize by late 2026.
“The war is hitting the global economy in cumulative waves: first through higher energy prices, then food prices, and finally higher inflation,” said Indermit Gill, World Bank Group Chief Economist.
He warned that poorer households and heavily indebted developing economies would be the most affected.
Additionally, fertilizer prices are expected to rise 31 percent in 2026, with urea prices jumping 60 percent, pushing affordability to its weakest level since 2022 and threatening agricultural output, according to the report.
The World Food Program estimates that prolonged disruption could push up to 45 million people into acute food insecurity.
Base metals such as copper, aluminium, and tin are also forecast to reach record highs, supported by demand from data centres, electric vehicles, and renewable energy.
Precious metals are also expected to rise 42 percent, as geopolitical uncertainty boosts demand for safe-haven assets.
The bank said that higher commodity prices will accelerate inflation and weaken global growth. Inflation in developing economies is projected at 5.1 percent in 2026, about one percentage point higher than pre-war estimates, while growth is expected to slow to 3.6 percent, down 0.4 percentage points from earlier forecasts.
The report added that more than 70 percent of commodity-importing countries and over 60 percent of exporters could see weaker-than-expected growth.
In a downside scenario where the conflict escalates, Brent oil could average $115 per barrel in 2026, with inflation in developing economies rising to 5.8 percent, levels last seen during the 2022 energy crisis.
“The succession of shocks over the decade has sharply reduced fiscal space,” said Ayhan Kose, World Bank Deputy Chief Economist. He urged governments to avoid broad subsidies and instead focus on targeted, temporary support for vulnerable groups.
The report also found that oil price volatility doubles during periods of geopolitical tension, with a one percent drop in supply pushing prices up by 11.5 percent. The effects spill over into gas and fertilizer markets, amplifying risks to food security and poverty reduction.
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