The Middle East situation is having an adverse effect on commodity prices and logistics, the World Bank said on Thursday, citing complaints by its clients in emerging markets.
In a statement on the conflict, the institution observed that shipping route disruptions are increasing costs, with supply risks spreading from energy into fertilizers and other critical agricultural inputs.
Crude oil prices rose by nearly 40 percent over the past month, LNG shipment costs to Asia increased by almost two-thirds, and nitrogen-based fertilizer prices rose by nearly 50 percent in March.
To ease the conflict’s impact, the World Bank is liaising with governments, the private sector, regional partners, and other stakeholders to help them through the current challenges.
The institution is also monitoring global market developments, while in direct contact with the most affected client countries to understand what they are facing and to help navigate the crisis.
“We are ready to respond at scale — combining immediate financial relief with policy expertise and private sector support for the recovery of jobs and growth,” the statement reads.
The World Bank plans to support governments, firms, and households by delivering immediate relief through its portfolio, crisis response toolkit, and pre-arranged financing facilities.
These include fast-disbursing instruments that would sustain recovery, and provision of essential liquidity, trade finance, and working capital, through the institution’s private sector arms.
Noting that the full range of the conflict’s impacts cannot be predicted, the World Bank shares the view that the longer it lasts, the more damage it portends for countries and critical infrastructure.
Foreign ministers from the G7 are meeting in France for discussions on the wars in Iran and Ukraine, regional stability in the Middle East and the Indo-Pacific, among other pressing global issues.
World Bank spotlights Middle East conflict as costs skyrocket
