Energy prices rise 24% as oil supply drops 10 million barrels a day

Strait of Hormuz disruption triggers largest oil shock since 2022, driving global price gains.

Energy prices are projected to rise 24% in 2026, reaching their highest level since Russia’s 2022 invasion of Ukraine, according to the World Bank Group.

Commodity prices are expected to rise 16% in 2026, driven by higher energy, fertiliser, and metals prices.

The report estimates an initial reduction in global oil supply of about 10 million barrels per day following attacks on energy infrastructure and disruptions in the Strait of Hormuz, which carries about 35% of global seaborne crude oil trade.

Brent crude oil prices remain more than 50% higher in mid-April compared with the start of the year. The World Bank projects Brent to average $86 a barrel in 2026, up from $69 in 2025.

The baseline scenario assumes that the most severe disruptions ease in May and that shipping through the Strait of Hormuz returns gradually to pre-war levels by late 2026.

The report states that the current shock has pushed oil prices to levels last seen after Russia’s 2022 invasion of Ukraine, which previously triggered major global energy market disruption.

In a higher-risk scenario, Brent could average $115 a barrel in 2026 if damage to oil and gas infrastructure persists and export recovery slows.

Energy price shocks are expected to transmit across other commodity markets. Natural gas and fertiliser prices are projected to increase, whilst fertiliser prices are forecast to rise 31% in 2026. Urea prices are expected to rise 60% in 2026.

Base metals, including aluminium, copper, and tin, are projected to reach record levels, driven by demand from data centres, electric vehicles, and renewable energy systems. Precious metals prices are forecast to rise 42% in 2026.

The World Bank says oil price volatility increases during periods of geopolitical stress, with swings about twice as large as in calmer periods. It estimates that a 1% decline in oil production linked to geopolitical shocks raises prices by 11.5%.

The report adds that a 10% oil price increase from supply shocks raises natural gas prices by about 7%, and fertiliser prices by more than 5%, with effects peaking about one year after the initial shock.

The report forecasts inflation in developing economies at 5.1% in 2026 and growth at 3.6%, a downgrade of 0.4 percentage points from January projections.