The ongoing conflict in Iran, with no end in sight, is increasingly raising global concerns about its impact on economic development and energy security.

In its latest Commodity Markets Outlook released on Tuesday, the World Bank warned that energy prices may surge 24% in 2026 – reaching their highest level since the Russia-Ukraine conflict erupted in 2022 – driven by the war in the Middle East. Overall commodity prices are projected to increase by 16%.

The World Bank said that attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles about 35% of global seaborne crude oil trade, have triggered the largest oil supply shock on record, with an initial reduction in global oil supply of about 10 million barrels per day.

Fertilizer prices are projected to increase by 31% in 2026, driven by a 60% jump in urea prices, while prices for base metals, including aluminum and copper, are expected to reach all-time highs, said the report.

"The war is hitting the global economy in cumulative waves," said Indermit Gill, the World Bank Group's chief economist and senior vice president for Development Economics, warning that poorer populations will be hardest hit.

In the United States, mixed consumer confidence readings come as markets continue to monitor diplomatic developments surrounding the Iran conflict, as well as the potential reopening of the Strait of Hormuz.

Data released by The Conference Board on Tuesday showed the Consumer Confidence Index edged up to 92.8 in April from a revised reading of 92.2 in March. However, the University of Michigan's Consumer Sentiment Index published on Friday painted a more pessimistic picture, dropping to 49.8 in April from 53.3 in the previous month. The index below 50 marks the lowest reading in the survey's more-than-50-year history, falling below the previous low of 50 recorded in June 2022 during a period of intense inflation.

Despite the mixed consumer confidence readings, analysts noted that the conflict in the Middle East is beginning to exert serious pressure on global economies. "We're not yet predicting a recession, but it's going to hammer growth and increase inflation," said Carsten Brzeski, global head of macro at ING.

In Spain, Vice President and Economy Minister Carlos Cuerpo on Tuesday warned that the ongoing conflict could shave between 0.4 and 1.0% off the country's GDP in 2026, while pushing inflation higher.

Cuerpo said The Bank of Spain estimates a central scenario of around a 0.8% hit to economic growth, adding that inflation could rise by around 1 percentage point, bringing average inflation for the year to around 3.1%.

Noting the high level of uncertainty is forcing analysts to work with scenarios rather than forecasts, Cuerpo warned that the economic outlook would deteriorate the longer the conflict continues.

Separately, at the 19th Consultative Meeting of Gulf Cooperation Council (GCC) leaders held in Saudi Arabia's port city of Jeddah on Tuesday, GCC Secretary General Jasem Mohamed Albudaiwi said the leaders rejected any measures that would negatively affect navigation through the Strait of Hormuz.

The leaders stressed the need to restore security and freedom of navigation in the strait and return conditions there to what they were before February 28, he added.

Across Africa, countries are scrambling to offset the impact of rising fuel prices and imported inflation following the Middle East conflict.

For example, South Africa on Tuesday announced an extension of temporary fuel levy relief measures to cushion households from rising fuel prices following the Middle East conflict.

The National Treasury and the Department of Mineral and Petroleum Resources said in a joint statement that a temporary reduction of 3 rand (about $0.18) per liter in the general fuel levy for petrol, first announced on March 31, will be extended until June 2.

In Namibia, Kaire Mbuende, director general of National Planning Commission, said on Tuesday the country remains vulnerable to imported inflation linked to global energy markets, rising transport and logistics costs, and possible supply chain disruptions.

He said the government is pursuing measures to reinforce economic, social and environmental resilience, including achieving energy security through renewable energy, strengthening food systems and expanding social protection to shield vulnerable households from shocks.

In southeast Asia, energy ministers from the Association of Southeast Asian Nations (ASEAN) have stressed the urgency of coordinated regional action amid ongoing geopolitical tensions in the Middle East, which continue to roil global energy markets and supply chains, particularly for oil and gas.

The ministers reaffirmed the bloc's collective responsibility to safeguard energy security through stronger regional cooperation, timely policy responses, and closer engagement with dialogue partners via ASEAN-led mechanisms.

(With input from Xinhua)