World Bank Forecasts Energy Price Surge Amid Middle East Conflict

The World Bank, in its latest Commodity Markets Outlook released on Tuesday, projected a significant rise in energy prices by 24% in 2026, assuming the most severe disruptions from the Middle East conflict end by May. According to Jin10, this would mark the highest level since the Russia-Ukraine conflict four years ago. The World Bank warned that if hostilities in the region escalate and supply disruptions persist longer than expected, commodity prices could rise further. The bank's baseline scenario assumes that shipping through the Strait of Hormuz will gradually return to near pre-conflict levels by October, although risks are "clearly tilted" towards higher prices. The World Bank's baseline forecast indicates an overall 16% increase in commodity prices in 2026, driven by soaring energy and fertilizer prices and record highs in several major metal prices. The report highlighted that attacks on energy infrastructure and disruptions in strait shipping have triggered the largest oil supply shock on record. The bank expects the average price of Brent crude oil to reach $86 per barrel in 2026, a significant increase from $69 per barrel in 2025. The report also noted that if key oil and gas facilities suffer further war damage and export recovery is slow, the average Brent crude price could reach as high as $115 per barrel this year.