World Bank Warns of 24% Energy Price Surge by 2026 Amid Middle East Conflict

The World Bank has forecasted a significant surge in energy prices for 2026 due to ongoing disruptions caused by the war in the Middle East. According to the bank's Commodity Markets Outlook, commodity prices could rise by as much as 24% next year if hostilities end by May, with Brent crude oil prices averaging $86 a barrel.

The World Bank also warned that prolonged supply disruptions and attacks on energy infrastructure in the Strait of Hormuz would lead to even higher prices. In this scenario, Brent oil could average as high as $115 a barrel. The bank's baseline projects a 16% increase in overall commodity prices for 2026.

The surge in energy prices is expected to have a ripple effect on global economies, leading to higher food prices and inflation. World Bank chief economist Indermit Gill stated that the war would hit the global economy in 'cumulative waves', with higher interest rates making debt even more expensive.