World Bank Forecasts Massive Energy Price Surge as Middle East Conflict Destabilizes Global Markets

New World Bank report forecasts a massive energy price surge in 2026, driving global inflation and threatening food security in developing nations.

By: AXL Media

Published: Apr 28, 2026, 10:56 AM EDT

Source: Information for this report was sourced from Engineering News

A Volatile Rebound in Global Energy Costs

Energy prices are on a trajectory to rise by 24% during 2026, reaching their highest levels since the onset of the Russia, Ukraine conflict. According to the World Bank Group, the ongoing war in the Middle East has introduced a severe shock to commodity markets, with overall commodity prices expected to climb 16% this year. The Brent crude oil benchmark is forecast to average $86 per barrel, a sharp increase from the $69 average seen in 2025. Indermit Gill, World Bank Group Chief Economist, noted that these surges create cumulative waves that impact food prices and debt costs, effectively stalling global development.

Supply Shocks and Maritime Disruptions

The primary driver of the current oil crisis is the disruption of shipping through the Strait of Hormuz, a critical artery that handles approximately 35% of the world’s seaborne crude oil trade. Analysis indicates this has triggered the largest oil supply shock on record, initially removing 10 million barrels a day from the global market. While baseline forecasts assume these acute disruptions may subside by late 2026, the immediate impact has already pushed Brent prices 50% higher in April than at the start of the year. Any escalation in hostilities could potentially drive oil prices as high as $115 per barrel.

Agriculture and the Growing Food Security Crisis

The energy crisis is directly translating into a 31% projected increase in fertilizer prices, primarily due to a 60% jump in urea costs. This spike has reduced fertilizer affordability to its lowest levels in four years, threatening future crop yields and eroding the incomes of farmers globally. The UN World Food Programme suggests that if these supply pressures persist, up to 45 million more people could face acute food insecurity this year. The link between fuel costs and food production remains a critical vulnerability for developing economies already struggling with high debt burdens.