"Thought the Ceiling Was High, but It's About to Break Through the Roof"..."Oil Prices Aren't the End" - World Bank Issues Stark Warning
by Lee Hyunwoo
Published 29 Apr.2026 06:43(KST)
Updated 29 Apr.2026 10:29(KST)
"Oil Supply Shock from Hormuz Blockade"
"Fertilizer Price Surge Drives Food Prices Higher"
The World Bank (WB) forecasted on the 28th (local time) that, due to the aftermath of the Iran war, energy prices will surge by 24% this year, and major commodity prices will also rise by more than 16%.
On this day, the WB made this projection in its April Commodity Markets Outlook report, stating that energy prices this year could reach their highest level since the outbreak of the Ukraine war in 2022, due to the prolonged blockade of the Strait of Hormuz. The WB pointed out, "Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles about 35% of global seaborne oil trade, have caused the largest oil supply shock on record."
As the blockade of the Strait of Hormuz has continued for nearly two months, global oil supply has dropped by more than 10 million barrels per day, and by mid-April, the price of Brent crude remained over 50% higher compared to the start of the year. The WB projected, "The average price of Brent crude will surge from $69 per barrel last year to $86 per barrel this year." It further explained, "This projection is based on the assumption that the worst disruptions end in May and maritime transport through the Strait of Hormuz gradually returns to pre-war levels by the end of this year."
The WB warned that if the Iran war is prolonged, food prices will also rise following energy prices, causing a severe inflation shock worldwide. Indermit Gill, Chief Economist at the WB, said, "First, it impacts the global economy through energy price increases, then through rising food prices, and finally through high inflation," adding, "This will trigger interest rate hikes and increase the burden of debt repayment."
Following the rise in energy prices, the price of urea, a nitrogen-based fertilizer mainly produced from natural gas, has surged by 60% this year, and the overall fertilizer price is expected to increase by 31%. It is analyzed that this jump in fertilizer prices will immediately affect global food prices.
The WB stated, "Inflation in developing countries is expected to average 5.1% in 2026 under the baseline scenario," adding, "This is up from 4.7% last year and more than 1 percentage point higher than pre-war forecasts. If the war continues, inflation could soar to 5.8%."
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