The World Bank Group reported on April 28, 2026, in Washington that global commodity prices are projected to rise due to the Middle East conflict and disruptions in the Strait of Hormuz. The forecast highlights rising energy costs driving inflation, weakening economic growth, and increasing risks to global food security.
Global markets are adjusting to a renewed supply shock as geopolitical tensions disrupt energy flows. The World Bank’s latest Commodity Markets Outlook provides an assessment of how these pressures are expected to affect inflation, growth, and food systems worldwide.
Global Commodity Outlook and Key Forecasts
Key Figures Snapshot
The World Bank Group forecasts that energy prices will rise by 24% in 2026, reaching their highest levels since 2022. Meanwhile, overall commodity prices are expected to increase by 16%, driven by higher costs for fertilizers and metals. This combination reflects a broad-based inflationary pressure linked directly to geopolitical disruption.
| Indicator | Recent Movement | Context |
|---|---|---|
| Energy Prices | +24% in 2026 | Driven by Middle East conflict and supply disruptions, according to World Bank Group |
| Overall Commodities | +16% in 2026 | Broad increase across energy, fertilizers, and metals per World Bank Commodity Markets Outlook |
| Fertilizer Prices | +31% in 2026 | Linked to rising input costs and supply chain strain, World Bank data shows |
These projections indicate that multiple commodity sectors are experiencing synchronized price increases. As a result, inflationary pressure is expected to extend beyond energy markets into food and industrial supply chains, reinforcing global economic strain.
Energy Supply Shock and Oil Market Impact
Oil Price Trends
The World Bank Group identifies disruptions in the Strait of Hormuz as a central driver of the current supply shock. Approximately 35% of global seaborne crude oil passes through this route, making it critical to global energy stability. As a result, Brent crude prices are projected to average $86 per barrel in 2026, up from $69 in 2025.
The report states that global oil supply has fallen by about 10 million barrels per day due to attacks on infrastructure and shipping constraints. Consequently, Brent prices were more than 50% higher in mid-April compared with the start of the year. This sharp increase reflects how geopolitical shocks translate quickly into market volatility and consumer costs.
Inflation and Economic Growth Risks
Economic Indicators
According to the World Bank Group, inflation in developing economies is now projected to reach 5.1% in 2026, up from 4.7% in the previous year. This rise is directly linked to higher prices for energy and essential goods, which reduce household purchasing power. Meanwhile, economic growth in these economies is forecast to slow to 3.6%, reflecting the combined impact of rising costs and reduced exports.
The World Bank notes that more than 70% of commodity-importing countries and over 60% of exporters may experience weaker growth than previously expected. This widespread effect highlights how interconnected global markets amplify regional disruptions. In practice, higher living costs and slower economic expansion create compounding risks for both governments and households.
Food Security and Fertilizer Pressures
Food Risk Outlook
The World Bank Group reports that fertilizer prices are projected to rise by 31% in 2026, with urea prices increasing by as much as 60%. This surge is expected to reduce affordability for farmers, directly affecting crop production. As a result, global food supply pressures are likely to intensify in the coming months.
According to the World Food Programme, cited in the World Bank report, up to 45 million additional people could face acute food insecurity if the conflict persists. This projection reflects the link between higher input costs and reduced agricultural output. The combined effect increases the risk of food shortages and price volatility in vulnerable regions.
Escalation Scenarios and Market Volatility
Stakeholder Comments
Indermit Gill, Chief Economist of the World Bank Group, stated that the conflict is impacting the global economy in successive waves, starting with energy and extending to food and inflation. He noted that rising costs will disproportionately affect lower-income populations, who spend a larger share of income on essentials. This assessment is based on World Bank economic modelling and historical commodity trends.
- Policy Guidance: Ayhan Kose of the World Bank Group advises targeted fiscal support to vulnerable households to avoid market distortions
- Volatility Risk: World Bank analysis shows geopolitical supply shocks can double oil price volatility compared to stable periods
- Spillover Effects: A 10% oil price increase can drive natural gas prices up 7% and fertilizer prices over 5%, per World Bank findings
These insights highlight the broader systemic risks tied to prolonged instability. As volatility increases, policymakers face limited fiscal space to respond, reinforcing the importance of targeted interventions.
The World Bank Group’s outlook shows that the current energy supply shock is likely to drive sustained inflation and slower global growth. Rising costs across energy, food, and industrial inputs are creating compounding economic pressures, particularly for developing economies.
While projections assume partial recovery in supply conditions, the report underscores that escalation risks remain significant. Continued disruption could intensify inflation and deepen food insecurity, extending the global economic impact.
Sources: World Bank Group – Commodity Markets Outlook (April 2026).
Prepared by Ivan Alexander Golden, Founder of THX News, an independent news organization delivering timely insights from global official sources.
Research combines AI-assisted analysis with human-edited accuracy and context.
