The outbreak of war in the Middle East represents a historic shock to commodity markets, resulting in March in the largest oil supply loss on record. Assuming the most acute phase of commodity trade disruptions ends in May, with shipping volumes transiting through the Strait of Hormuz gradually returning to near prewar levels by October, average commodity prices are projected to rise by 16 percent this year—the first annual increase since 2022. This would leave prices about 25 percent higher than expected in January 2026. This baseline projection hinges on developments in energy markets. With both oil and natural gas prices having soared due to supply shortfalls, average energy prices are forecast to increase by 24 percent in 2026. The Brent oil price is expected to average $86 per barrel this year, an upward revision of $26 since January. However, the supply shocks brought about by the war and its consequences are widespread, affecting many commodities and industrial inputs. Prices for crop fertilizers are expected to soar this year due to export disruptions and surging production costs, with input costs also exerting upward pressure on prices of food commodities and metals. Average base metals prices are projected to reach an all-time high, as are prices of precious metals, amid extraordinary volatility. Under the baseline assumptions, the rise in energy prices this year is set to slow growth in emerging market and developing economies (EMDEs) and drive their average inflation rate to a four-year high. Risks to the commodity price projections are tilted firmly toward higher prices. If disruptions in the Middle East prove more protracted or severe than assumed, the Brent oil price in 2026 could average $95 to $115 per barrel, with other commodity prices also far exceeding forecasts. In addition, base metals prices could increase more than anticipated amid inflexible supplies and resilient demand.