Dissecting the intersection of
Economics, Geopolitics & Financial Markets
If Brent = $100pB till end-2026 (black line), YoY oil inflation peaks in Q2 & Q4 at an avg. of around 55%. That is lower than Q2-2022 but well above Q4-2022. If Brent = $150pB (dotted line), the YoY oil inflation spikes of 120%+ look similar to the 2021 post-Covid “recovery inflation”.
Food prices could, roughly speaking, follow a similar pattern to 2022, as grains, energy & fertilizer exports were hit after RU’s invasion of Ukraine in Feb-22. Using the 2022 MoM rates for the 2026 FAO World Food Price Index, YoY food inflation peaks at around 10% in Q2-2026 but falls thereafter (yellow line).
Differences in fertilizer-stocking across continents can blur the picture if the current conflict continues well into Q2, with YoY price volatility potentially lasting into 2027.
