Middle East War Disruptions Fuel 24% Energy Price Surge in 2026

The World Bank has forecasted a significant surge in energy prices for 2026, citing ongoing disruptions caused by the war in the Middle East. The bank predicts a 24% increase in energy prices, with Brent crude oil prices averaging $86 a barrel in 2026, up from $69 a barrel in 2025.

The forecast is based on the assumption that shipping volumes through the Strait of Hormuz will gradually return to pre-war levels by October. However, the World Bank warns that the risks are 'markedly tilted' toward higher prices if hostilities escalate or supply disruptions last longer than expected.

Fertilizer prices are also projected to increase by 31% in 2026, driven by a 60% jump in the price of urea. This could exacerbate food supply pressures and further erode farmers' incomes.