The World Bank has painted a stark picture of what the future of the global energy market looks like. The latest Commodity Markets Report predicts that energy prices will remain at historically high levels until the end of 2024.
The authors of the report suggest the increase in prices in the past two years has been the largest since the 1973 oil crisis. More specifically, analysts stress that energy prices are expected to rise more than 50% in 2022 before easing in 2023 and 2024.
They also note that the price of Brent crude oil is expected to average $100 (£79.6) a barrel in 2022, its highest level since 2013.
Price increases for food commodities—of which Russia and Ukraine are large producers—and fertilisers, which rely on natural gas as a production input, have been the largest since 2008, according to the report.
Indermit Gill, the World Bank’s Vice President for Equitable Growth, Finance, and Institutions, said: “Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s.
“As was the case then, the shock is being aggravated by a surge in restrictions in trade of food, fuel and fertilisers.
“These developments have started to raise the specter of stagflation. Policymakers should take every opportunity to increase economic growth at home and avoid actions that will bring harm to the global economy.”