The World Bank’s latest Commodity Markets Outlook, released in June 2026, reveals significant disruptions across global commodity markets driven by the ongoing Middle East conflict and the closure of the Strait of Hormuz, with fertilizer, food, and energy prices all experiencing sharp upward pressure.
According to the World Bank, disruptions in the Strait of Hormuz are tightening global fertilizer supplies, pushing urea prices to their highest level since 2022 and raising risks for food production and agricultural costs worldwide. The report highlights that fertilizer markets are under severe strain as natural gas input costs rise and shipping routes remain disrupted, with implications for the upcoming planting season in key agricultural regions across developing economies.
The World Bank’s Commodity Markets Outlook further documents that food prices are feeling the heat from the conflict, as rising energy, fertilizer, and shipping costs push global food price indices higher. Grain markets, oils and meals, and agricultural commodities are all affected by the compounding effects of higher input costs and logistical bottlenecks. The report warns that food inflation pressures are mounting, particularly for import-dependent low-income countries that are least able to absorb the additional costs.
In a separate finding from the same report, the World Bank notes that coal prices and consumption are rising as disruptions to natural gas supplies linked to the Middle East conflict push utilities back toward coal-fired power generation. The unexpected rebound in coal marks a reversal of prior decarbonization trends, with thermal coal demand increasing across several regions as energy security concerns take precedence over climate goals in the short term.
These commodity market developments are unfolding alongside broader economic strains. A joint statement issued by the heads of the International Energy Agency, the International Monetary Fund, the World Bank Group, and the World Trade Organization on May 29 highlighted that the war in the Middle East is generating substantial and highly asymmetric impacts on energy supplies, food security, and economic activity across countries. The statement noted that global oil inventories are being drawn down at a record pace in response to the major loss of supply through the Strait of Hormuz, presenting increasing risks for fuel security and broader economic resilience ahead of peak summer oil demand in the Northern Hemisphere.
The joint statement emphasized the importance of closely monitoring fertilizer supply chains, energy developments, and policy responses, with the institutions tracking and analyzing measures taken by governments to address the economic impact of the conflict. The heads of the four organizations committed to remaining in close contact and continuing to coordinate their support for the most affected countries.
Separately, the World Bank’s Global Economic Prospects report, also published in June, projects Brent crude oil prices to average $94 per barrel in 2026, a 36 percent increase above 2025 levels, assuming the worst disruptions abate by July. The report notes that developing economies face the most acute risks, with rising debt levels compounding the challenges posed by higher energy and food import bills.
Sources: [imf.org/worldbank.org]
