Analysts say Middle East disruptions have triggered the largest recent oil shock

The World Bank said on April 28 that the war in the Middle East has sent the global economy into its biggest energy price surge since Russia’s 2022 invasion of Ukraine. (worldbank.org) The bank said attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz triggered an initial loss of about 10 million barrels a day of global oil supply. Brent prices were still more than 50% above their start-of-year level in mid-April. (worldbank.org) The World Bank now expects energy prices to rise 24% in 2026, with Brent averaging $86 a barrel, up from $69 in 2025 if the worst disruptions ease in May. It also forecasts overall commodity prices to rise 16% this year. (worldbank.org) Oil is only part of the shock. The International Energy Agency said on April 24 that shipping disruption since early March has removed close to 20% of global liquefied natural gas supply from the market. (iea.org) The agency said gas prices in Asia and Europe hit their highest levels since January 2023 during March volatility, after the Strait of Hormuz was effectively closed to liquefied natural gas cargoes. Global liquefied natural gas production fell 8% from a year earlier. (iea.org) That matters because gas feeds power plants, factories and fertiliser production. The World Bank said fertiliser prices are projected to rise 31% in 2026, driven by a 60% jump in urea prices. (worldbank.org) (reliefweb.int) The spillover reaches industrial metals too. The World Bank said aluminum, copper and tin prices are expected to reach all-time highs, as the conflict collides with demand from data centers, electric vehicles and renewable energy. (worldbank.org) India is one of the clearest examples of how the shock spreads beyond oil traders. A Reuters report on April 29 said India’s government warned that the conflict has disrupted supplies of energy, fertilisers and industrial raw materials, while lifting costs and weakening trade. (usnews.com) India’s crude basket averaged $113 a barrel in March and was just under $115 through April 24, according to that government report. Merchandise exports fell 7.4% in March from a year earlier, with 24 of 30 major export categories declining. (usnews.com) Crisil Ratings said on March 5 that India imports about 85% of its crude and half of its liquefied natural gas, with 40% to 50% of crude and 50% to 60% of liquefied natural gas moving through Hormuz. It said Asian spot liquefied natural gas jumped to about $24 to $25 per million British thermal units from about $10. (crisilratings.com) Crisil said sectors exposed to direct trade, imported gas or crude-linked inputs include fertilisers, ceramics, airlines, travel operators, tyres, paints, specialty chemicals and synthetic textiles. India Ratings and Research separately said logistics, chemicals, fertilisers, cement, ceramics, city gas distribution and oil marketing companies were already under cost pressure. (crisilratings.com) (fortuneindia.com) Crisil’s April 10 economics note called the West Asia conflict “the largest energy shock on record,” echoing the World Bank’s warning that the damage is now moving from oil into gas, fertiliser and metals. The next question is duration: both forecasts assume the Strait of Hormuz gradually reopens rather than stays choked for months. (coalitiongreenwichuat.crisil.com) (worldbank.org)