Oil, gas, and food prices at risk as energy could jump 24%

The key factor has been disruptions to supply through the Strait of Hormuz, which before the conflict handled around 35% of global seaborne oil trade and up to 20% of liquefied natural gas shipments. The reduction in oil supply in March 2026 is estimated at about 10 million barrels per day, marking the largest supply shock on record.

Markets reacted with unprecedented speed. Brent crude rose from $72 per barrel at the end of February to $118 by the end of March. Even after a partial easing of tensions, prices remain above $90 and more than 50% higher than at the start of the year.

“The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive,” said World Bank Chief Economist Indermit Gill.

The energy shock has quickly spread to other markets. Liquefied natural gas prices in Asia jumped by 94% in March, while in Europe they rose by 59%. Fertilizers also saw sharp increases, with the index recording one of the largest monthly gains in the past decade, and urea prices rising by more than 50% in a single month.

On an annual basis, fertilizer prices are expected to increase by 31%, while food prices may rise by only about 2%, reducing affordability for the agricultural sector and squeezing farmers’ margins. At the same time, base metals prices have climbed by 29% year-on-year, while the precious metals index has surged by 84% since early 2025, reflecting strong demand for safe-haven assets.

The average Brent oil price in 2026 is forecast at around $86 per barrel, which is $26 higher than previous estimates. Under a negative scenario, the range could widen to $95-$115 per barrel.

Market sensitivity to geopolitical risks remains extremely high. Even a 1% reduction in oil production could lead to a price increase of more than 11%, nearly twice the impact of typical supply shocks.

The effects are already visible at the macroeconomic level. Growth forecasts for developing economies have been revised down to 3.6% from the previously expected 4%, while inflation is projected to accelerate to 5.1%. In the event of further oil price increases, inflation could reach 5.3-5.8%, levels comparable to the 2022 surge.

Rising energy prices are also intensifying food security risks. If oil prices remain above $100 per barrel, up to 45 million people could face acute food insecurity. The pressure is driven by higher fuel, logistics, and fertilizer costs, as well as declining real incomes.

Earlier, Qazinform News Agency reported that oil prices approached $100 per barrel amid a prolonged standoff between the United States and Iran and a lack of progress on reopening the Strait of Hormuz.