The World Bank has cautioned that a sustained rise in oil prices driven by escalating tensions in the Middle East could deepen food insecurity in developing countries, as higher energy and transport costs feed into global commodity prices.
In its latest Commodity Markets Outlook, the bank projected that global commodity prices will increase by 16 per cent in 2026, the first annual rise since 2022.
It attributed the forecast to ongoing supply disruptions in the Middle East, especially in energy and fertiliser markets, while noting that risks remain strongly skewed to the upside.
The report said Brent crude oil prices saw extraordinary volatility in the first quarter of 2026, fueled by disruptions to shipments through the Strait of Hormuz and attacks on key energy infrastructure in the region.
Brent climbed from around $72 per barrel at the end of February to a peak of about $118 by the end of March, marking the sharpest monthly increase on record.
Prices later eased following a ceasefire announcement and temporary sanctions relief for exports from Iran, Russia and Venezuela, alongside the release of emergency reserves by the International Energy Agency.
Despite the pullback, crude prices remained more than 50 per cent higher than their levels at the start of the year.
The World Bank projected that Brent crude would average $86 per barrel in 2026 before easing to around $70 in 2027, assuming that the most severe phase of supply disruptions subsides in the second quarter and global exports gradually stabilise.
However, it warned that a prolonged conflict or broader supply disruptions could drive prices significantly higher, with direct consequences for inflation, food prices, and economic growth in emerging markets.
“Early estimates by the World Food Programme suggest that if oil prices remain above $100 per barrel for an extended period, up to 45 million additional people could face acute food insecurity,” the report said.
The institution added that rising fuel costs are already feeding into higher transport and logistics expenses, while increased fertiliser prices could further strain agricultural output and worsen food affordability.
The World Bank’s fertiliser price index rose by more than 12 per cent in the first quarter of 2026, reaching its highest monthly level since 2022. The increase was largely driven by disruptions to exports and shipping routes through the Strait of Hormuz, a key corridor for fertiliser trade and energy supplies.
Prices of nitrogen- and phosphate-based fertilisers were particularly affected, with the World Bank projecting that fertiliser prices could climb by more than 30 per cent this year.
Although agricultural commodity prices have remained broadly stable so far, the World Bank cautioned that the effects of higher oil and fertiliser costs could still filter into domestic food inflation, particularly in import-dependent economies.
The institution projected that agricultural commodity prices would fall by six per cent in 2026, mainly driven by lower beverage prices, including cocoa and coffee. However, it noted that modest increases in food prices, combined with rising input costs, are likely to continue putting pressure on vulnerable households.
