Global energy prices are projected to surge 24% in 2026, driven by supply disruptions linked to the Middle East conflict, according to the World Bank.
The shock is expected to ripple across global markets, pushing up food prices, fertilizer costs, and overall inflation, while increasing economic pressure on both advanced and developing economies. Higher energy costs are also likely to raise production and transport expenses, amplifying price increases across multiple sectors.
Emerging and developing markets are particularly vulnerable, facing rising inflation, slower economic growth, and higher debt burdens. Overall, the outlook highlights how geopolitical disruptions in energy supply can quickly translate into broad macroeconomic and social impacts worldwide.
Key Overview
- Energy prices projected to rise 24% in 2026
- Overall commodity prices expected to increase 16%
- Fertilizer prices forecast to surge 31%
- Brent crude could average $86–$115 per barrel
- Emerging markets face rising inflation and slower growth
A Global Energy Shock Driven by Geopolitics
The World Bank has projected that global energy prices will rise by approximately 24% in 2026, as escalating conflict in the Middle East sends powerful shockwaves through global commodity markets.
According to the latest Commodity Markets Outlook, this surge would push energy prices to their highest levels since Russia’s 2022 invasion of Ukraine, underscoring the magnitude of the current disruption and its potential to reshape global economic conditions. The forecast is based on a baseline scenario in which the most acute supply shocks begin to ease by May, with shipping flows through critical trade routes gradually normalizing by October.
Even under this baseline, however, the outlook remains highly uncertain and vulnerable to further geopolitical escalation. The World Bank warns that risks are tilted toward even higher price increases, particularly if the conflict intensifies or supply disruptions persist beyond expected timelines. In such scenarios, global energy markets could face prolonged instability, with sustained upward pressure on prices.
This uncertainty is translating into significant volatility across energy markets, affecting not only fuel costs but also broader economic indicators such as inflation, trade balances, and industrial output. As energy prices rise, the effects ripple through supply chains, increasing production and transportation costs worldwide. In this sense, the current crisis is evolving into a system-wide economic shock, with far-reaching implications for both developed and emerging economies.
Markets move fast; don’t get left behind. We’ve paired the Serrari Group Market Index with a curated Marketplace and a comprehensive Wealth Builder Course to ensure you have the data—and the skills—to act on it.
Strait of Hormuz Disruptions and Supply Constraints
A central factor driving the surge in energy prices is the disruption of flows through the Strait of Hormuz, one of the world’s most strategically important chokepoints for oil and gas trade. The strait previously handled approximately 35% of global seaborne crude oil shipments, making it a critical artery for the functioning of global energy markets.
Attacks on energy infrastructure and shipping routes in the region have triggered what the World Bank describes as the largest oil supply shock on record, with an estimated reduction of around 10 million barrels per day in global supply. This sudden contraction has created a pronounced imbalance between supply and demand, intensifying competition for available resources and pushing prices sharply higher.
Brent crude prices have already risen by more than 50% since the start of the year, reflecting tightening supply conditions and heightened geopolitical risk. The World Bank forecasts that Brent could average $86 per barrel in 2026, up from $69 in 2025, with the potential to exceed $115 per barrel if disruptions intensify or recovery is delayed.
Beyond crude oil, the disruption of shipping routes has also constrained the flow of other key energy commodities, including liquefied natural gas (LNG) and refined petroleum products. This has compounded supply shortages and contributed to increased volatility across global energy markets, reinforcing the interconnected nature of energy supply chains.
Ripple Effects Across Commodities and Food Systems
The energy shock is not occurring in isolation—it is triggering cascading effects across global commodity markets, amplifying its impact on the broader global economy. The World Bank projects that overall commodity prices will rise by 16% in 2026, driven largely by increases in energy, fertilizer, and metals prices.
Fertilizer prices are expected to surge by 31% year-on-year, with urea prices rising by as much as 60%. This has direct and far-reaching implications for global agriculture, as higher input costs can reduce farmers’ ability to maintain production levels, lower crop yields, and increase the overall cost of food production. These pressures are likely to translate into higher food prices, placing additional strain on households, particularly in low-income regions.
Natural gas markets are also experiencing significant volatility. In Asia, LNG prices have surged by 94%, while European gas prices have risen by 59%, driven by supply shortages and increased competition for limited exports. These increases are particularly impactful for energy-intensive industries, which rely heavily on natural gas for both energy and production processes.
Together, these dynamics highlight the deeply interconnected nature of global commodity markets. Disruptions in energy supply quickly propagate across sectors, affecting agriculture, manufacturing, and consumer markets. The result is a multi-layered economic impact, where rising energy costs lead to higher production costs, increased food prices, and broader inflationary pressures.
In this context, the current crisis illustrates how geopolitical events can rapidly escalate into global economic challenges, affecting not just energy markets but the stability and affordability of essential goods worldwide.
Context is everything. While you follow today’s updates, use the Serrari Group Market Index and Marketplace to spot emerging shifts. Need to sharpen your edge? Our Wealth Builder Course turns these insights into a professional-grade strategy.
Inflationary Pressures and Economic Impact
The surge in energy and commodity prices is expected to have far-reaching macroeconomic consequences, extending well beyond the energy sector into broader economic stability and growth. According to Indermit Gill, the global economy is being affected in “cumulative waves”—first through higher energy prices, followed by rising food costs, and ultimately through broader inflationary pressures.
Inflation in developing economies is projected to rise to 5.1% in 2026, up from 4.7% the previous year, and could climb as high as 5.8% if the conflict persists and supply disruptions continue. At the same time, economic growth in these regions is expected to slow to 3.6%, down from earlier projections of 4%, reflecting the dual pressure of rising costs and weakening demand.
Higher inflation is also likely to trigger monetary tightening, with central banks raising interest rates to contain price increases. This, in turn, raises borrowing costs for governments, businesses, and households, making it more expensive to finance investment and consumption. For many countries—particularly those already carrying high levels of debt—this creates an additional layer of financial strain.
Emerging markets are especially vulnerable, as they often have limited fiscal space and are more exposed to external shocks. Currency depreciation, capital outflows, and rising debt servicing costs could further compound the economic impact. The World Bank warns that poorer and highly indebted economies will be hardest hit, as they have fewer tools available to absorb rising costs and economic volatility.
In this context, the current energy shock is not only a market disruption but a systemic economic challenge, with the potential to slow global growth and widen inequalities between developed and developing economies.
Food Security Risks Intensify
One of the most critical and immediate consequences of rising energy and fertilizer prices is the growing threat to global food security. Higher energy costs directly increase the price of agricultural inputs such as fuel, transportation, and irrigation, while rising fertilizer prices significantly raise the cost of crop production.
As a result, farmers may reduce fertilizer usage or scale back production, leading to lower crop yields and tighter food supply. These dynamics ultimately translate into higher food prices, which disproportionately affect low-income households that spend a larger share of their income on basic necessities.
According to the World Food Programme, an additional 45 million people could face acute food insecurity if the conflict continues and supply pressures persist.
The implications extend beyond economic hardship to broader humanitarian concerns. Rising food insecurity can lead to increased malnutrition, reduced access to essential nutrients, and heightened vulnerability among already at-risk populations. In some regions, sustained food price increases may also contribute to social instability and geopolitical tensions, particularly in countries heavily dependent on food imports.
This highlights how energy market disruptions can have deep and far-reaching social consequences, affecting not only economic systems but also livelihoods, health, and human well-being on a global scale.
Outlook: Persistent Volatility and Structural Shifts
Looking ahead, the outlook for global energy markets remains highly uncertain and volatile. While the baseline scenario assumes a gradual normalization of supply conditions—particularly through the reopening of key shipping routes—the risk of prolonged disruption remains significant.
In the near term, energy prices are expected to remain elevated, driven by a combination of geopolitical tensions, constrained supply, and sustained global demand. Market volatility is likely to persist, with prices reacting quickly to developments in the Middle East and other key producing regions.
Over the longer term, the current crisis may accelerate structural changes in the global energy system, reshaping how energy is produced, traded, and consumed. Key trends are likely to include:
- Increased investment in energy diversification and security, reducing reliance on single regions or supply routes
- Greater emphasis on renewable energy and domestic production, as countries seek to enhance resilience
- Shifts in global trade patterns, including new supply chains and partnerships for energy and critical commodities
These changes reflect a broader recognition of the vulnerabilities inherent in the current energy system, particularly its exposure to geopolitical risks and supply disruptions.
Ultimately, the current shock underscores the urgent need to build more resilient, diversified, and sustainable energy systems. While the immediate impact is being felt through higher prices and economic strain, the longer-term response may drive a more fundamental transformation—accelerating the transition toward a more secure and low-carbon global energy landscape.
Your financial future isn’t something you wait for—it’s something you build.
The real question is: when do you begin?
Move beyond simply staying informed.
Navigate the markets with clarity—track trends through the Serrari Group Market Index, uncover opportunities in the Serrari Marketplace, and build practical knowledge with our Curated Wealth Builder Course.
Stay connected to what truly matters.
Get daily insights on macro trends and financial movements across Kenya, Africa, and global markets—delivered through the Serrari Newsletter.
Growth opens doors.
Advance your career through professional programs including ACCA, HESI A2, ATI TEAS 7 , HESI EXIT , NCLEX – RN and NCLEX – PN, Financial Literacy!🌟—designed to move you forward with confidence.
See where money is flowing—clearly and in real time.
Track Money Market Funds, Treasury Bills, Treasury Bonds, Green Bonds, and Fixed Deposits, alongside global and African indexes, key economic indicators, and the evolving Crypto and stablecoin landscape—all within Serrari’s Market Index.
