The World Bank forecasts a 24% increase in global energy prices in 2026

Global energy prices are expected to rise by approximately 24% this year, according to the baseline forecast, which anticipates that the most severe supply disruptions will end in May. This is stated in the World Bank’s Commodity Markets Outlook.

Overall commodity prices are expected to rise by 16% this year, reaching their highest level since 2022 amid the war with Iran.

Since the escalation of the conflict in the Middle East, energy and fertilizer prices have risen to multi-year highs. As noted, the effective closure of the Strait of Hormuz—which accounted for about one-third of global seaborne crude oil trade prior to the conflict—has caused a historic shock to energy and commodity markets.

“The war is hitting the global economy in cumulative waves: first through rising energy prices, then through rising food prices, and finally through higher inflation, which will lead to higher interest rates and make debt even more expensive,” noted Indermit Gill, Chief Economist of the World Bank Group and Senior Vice President for Development Economics.

The report also notes that over the past two months, there has been fierce competition among buyers worldwide for LNG supplies following a sharp drop in exports from the Middle East. This has led to rising natural gas prices in Asia and Europe. The Asian LNG benchmark, according to the World Bank, rose by 94% in March, while European natural gas prices rose by 59%.

It is worth noting that in April, the European gas market continues to be driven more by political statements and uncertainty regarding the conflict in the Middle East than by fundamental indicators.