The World Bank Commodity Markets Outlook projects energy prices will surge 24% in 2026. This forecast represents the largest price increase since the 2022 energy crisis. The report attributes the rise to ongoing war in the Middle East and disruptions to global oil, gas, and LNG supplies.
Attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz have triggered the largest oil supply shock on record. Brent crude is expected to average $86 a barrel in 2026. This price marks a significant increase from the $69 average projected for 2025. In an escalation scenario, prices could reach $115 a barrel.
The World Bank warns this shock will fuel inflation and slow economic growth, particularly in developing nations. These conditions provide a major tailwind for the VDE ETF as U.S. gasoline prices hit a four-year high. The report links recent energy sector outperformance to these heightened geopolitical risks.