Middle East War Triggers Biggest Energy Price Shock in Four Years

The war in the Middle East is poised to deliver the most severe blow to global energy markets since Russia’s invasion of Ukraine, the World Bank warned this week, with consequences stretching from oil fields to farmlands to the dinner tables of the world’s poorest households.

Key takeaways

• Brent crude is forecast to average $86/barrel in 2026 as Middle East disruptions slash global oil supply by roughly 10 million barrels per day.
• Fertilizer prices jumping 31% could push up to 45 million more people into acute food insecurity this year.
• Developing economies hit hardest: Growth slows to 3.6% while inflation climbs to 5.1%, with over 60% of commodity exporters and 70% of importers facing weaker-than-expected performance.

In its April 2026 Commodity Markets Outlook, the Bank projects energy prices will surge 24% this year, their highest level since 2022, while overall commodity prices are forecast to rise 16%, driven by soaring energy and fertilizer costs alongside record-high prices for key metals.

The trigger is a historic disruption to oil flows. Attacks on energy infrastructure and shipping blockages in the Strait of Hormuz, which handles roughly 35% of global seaborne crude, have produced the largest oil supply shock on record, cutting global supply by about 10 million barrels per day. Brent crude is now forecast to average $86 a barrel in 2026, up from $69 last year.

The ripple effects are severe. Fertilizer prices are projected to climb 31%, driven by a 60% jump in urea prices, threatening crop yields and farmers’ incomes worldwide.

If the conflict drags on, up to 45 million additional people could be pushed into acute food insecurity this year, according to the World Food Programme. Meanwhile, precious metals prices are forecast to rise 42% as investors seek safe-haven assets amid deepening geopolitical uncertainty.

The macroeconomic damage is already being priced in. Inflation in developing economies is now projected to average 5.1% in 2026, a full percentage point above pre-war expectations.

Developing economies are expected to grow just 3.6% this year, with more than 60% of commodity exporters and 70% of commodity importers worldwide facing weaker growth than anticipated in January.

World Bank Chief Economist Indermit Gill did not mince words:

“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation. The poorest people will be hit the hardest. All of this is a reminder of a stark truth, war is development in reverse.”

The outlook could darken further. Should hostilities escalate or disruptions last longer than projected, Brent oil could average as high as $115 a barrel, pushing developing-economy inflation to 5.8%, a level surpassed only in 2022 over the past decade.

Deputy Chief Economist Ayhan Kose urged targeted action over sweeping intervention: governments, he argued, should deliver rapid, temporary support to the most vulnerable rather than broad fiscal measures that risk distorting markets and depleting fiscal buffers.

The message from Washington is unambiguous, the world is entering a period of compounding commodity stress, and the countries with the least room to absorb it will bear the greatest cost.

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