The World Bank has raised fresh concerns over the growing impact of rising global oil prices, warning that an extended energy shock triggered by the escalating conflict in the Middle East could significantly worsen food insecurity across developing nations.
In its latest Commodity Markets Outlook report, the global financial institution stated that sustained increases in crude oil prices are already placing additional pressure on vulnerable economies through higher transportation costs, rising fertiliser prices, and increasing inflation.
According to the report, global commodity prices are projected to rise by 16 per cent in 2026 — marking the first major annual increase since 2022 — largely due to continued instability in the Middle East and disruptions affecting energy and fertiliser supply chains.
Oil Price Surge Raises Global Economic Concerns
The World Bank explained that Brent crude oil prices witnessed extreme volatility during the first quarter of 2026 as tensions around the Strait of Hormuz disrupted global oil shipments and regional energy infrastructure.
Oil prices reportedly climbed from around $72 per barrel in late February to as high as $118 per barrel by the end of March, representing one of the sharpest monthly increases ever recorded in global energy markets.
Although prices later moderated following ceasefire announcements and temporary sanctions relief involving Iran, Russia, and Venezuela, the World Bank noted that crude prices still remain more than 50 per cent higher than levels recorded at the beginning of the year.
The institution now projects Brent crude to average approximately $86 per barrel throughout 2026 before potentially easing to around $70 in 2027 — provided geopolitical tensions do not escalate further.
However, the lender warned that any prolonged conflict or additional disruptions to global oil supply routes could push prices even higher, worsening inflationary pressures and threatening economic stability in many emerging economies.
Rising Fuel Costs Could Trigger Food Insecurity
One of the strongest warnings contained in the report focused on the growing risk of food shortages and hunger in low-income countries.
The World Bank disclosed that early projections from the World Food Programme indicate that if oil prices remain above $100 per barrel for a prolonged period, as many as 45 million additional people worldwide could face acute food insecurity.
The report noted that increasing fuel costs are already driving up transportation and logistics expenses globally, making it more expensive to move food products across supply chains.
At the same time, soaring fertiliser prices are expected to place additional strain on agricultural production, particularly in import-dependent countries that rely heavily on foreign agricultural inputs.
Fertiliser Prices Hit Highest Levels Since 2022
The World Bank revealed that its fertiliser price index rose by more than 12 per cent during the first quarter of 2026, reaching its highest monthly level in nearly four years.
The increase was largely linked to disruptions in shipping activities through the Strait of Hormuz, one of the world’s most strategic trade routes for energy and fertiliser exports.
According to the report, nitrogen and phosphate-based fertilisers have experienced the sharpest price increases, while fertiliser prices overall are projected to rise by more than 30 per cent before the end of the year.
Experts fear that higher fertiliser costs could reduce farming output, increase production expenses for farmers, and ultimately push food prices even higher across global markets.
Developing Economies Face Greater Pressure
While agricultural commodity prices have remained relatively stable so far, the World Bank warned that the combined impact of expensive oil, rising fertiliser costs, and weaker local currencies could intensify domestic food inflation in many developing nations.
Countries already struggling with poverty, inflation, insecurity, and weak infrastructure are expected to face the biggest challenges.
The institution also revised its economic growth forecast for emerging markets and developing economies downward, reducing projected growth from four per cent to 3.6 per cent for 2026.
Inflation projections were equally adjusted upward, with expected inflation in developing economies now estimated at 5.1 per cent, compared to the earlier forecast of 4.1 per cent.
According to the World Bank, the latest Middle East crisis has added new pressure to an already fragile global economy still recovering from the effects of the COVID-19 pandemic and the Russia-Ukraine war.
Metals, Gas and Precious Commodities Also Rising
Beyond oil and food, the report highlighted sharp increases across several commodity sectors.
The World Bank projects metals and minerals prices to rise by 17 per cent this year due to growing supply concerns and sustained industrial demand.
Meanwhile, prices of precious metals such as gold, silver, and platinum are expected to surge by as much as 42 per cent amid rising geopolitical uncertainty and increased investor demand for safe-haven assets.
Natural gas markets have also tightened considerably, with Asian LNG prices climbing 94 per cent during March, while European gas prices jumped 59 per cent due to disruptions in Middle Eastern energy exports.
Global Risks Remain High
The World Bank concluded that risks to the global commodity market remain heavily skewed to the upside, particularly if geopolitical tensions intensify further or supply chain disruptions persist.
The institution also warned that extreme weather conditions and growing biofuel demand could place additional upward pressure on food prices in the coming months.
Economic analysts say the situation could become especially difficult for African and other import-dependent economies, where rising fuel and food prices often translate directly into increased hardship for households and businesses.
As global energy markets remain unstable, governments across developing countries may now face growing pressure to strengthen food security policies, support local agriculture, and cushion citizens against worsening inflation and rising living costs.
