On the 28th, the World Bank released its April Commodity Markets Outlook report, forecasting that even if severe supply disruptions caused by the Middle East conflict end by May, global energy prices will still surge by 24% in 2026.
The report states that the main driver behind rising energy prices is oil. With Middle East oil exports shrinking sharply, Brent crude futures are expected to remain elevated in the near term, thereby curbing oil demand. The report forecasts the average Brent crude futures price in 2026 to be $86 per barrel, a significant increase over last year.
The report also predicts that overall commodity prices will rise by 16% this year, fueling inflation and hindering global economic growth. Growth in developing economies is projected at 3.6% this year, down 0.4 percentage points from January.
Indermit Gill, World Bank Senior Vice President and Chief Economist, said that the war in the Middle East is inflicting a cumulative shock on the global economy. Spikes in energy and food prices, along with heightened inflation, will lead to higher interest rates. The poorest groups and developing economies already struggling with heavy debt burdens will be hit the hardest.
The report warns that if the Middle East conflict escalates or related supply disruptions last longer than expected, commodity prices will climb even higher. In a severe scenario, this year's average Brent crude futures price could reach $115 per barrel (about RM454.16).