WORLD BANK
Global commodity prices are projected to rise by 23 per cent in 2026, driven by escalating tensions in the Middle East, declining oil inventories and disruptions to food supplies.
The projection is contained in the World Bank Group’s latest Commodity Markets Outlook, released on Wednesday.
The report warned that rising energy and food prices could worsen inflation, food insecurity and economic growth, particularly in vulnerable countries.
According to the report, energy prices are expected to increase by 32 per cent in 2026, reversing three consecutive years of decline, before moderating in 2027.
It projected that Brent crude oil would average 91 dollars per barrel in 2026, up from 69 dollars in 2025, before declining to 79 dollars per barrel in 2027.
Food commodity prices are also expected to rise by about 10 per cent in 2026 and a further seven per cent in 2027, representing a cumulative increase of 18 per cent.
The report attributed the projected increase to disruptions to grain shipments caused by the Middle East conflict, the threat of El Niño to agricultural harvests, and higher fuel and fertiliser costs.
It, however, projected that overall commodity prices would decline by seven per cent in 2027, assuming no major escalation of conflicts affecting global commodity supplies.
The World Bank warned that the outlook could deteriorate further if the Middle East conflict escalated and damage to Russia’s oil infrastructure persisted.
It added that a combination of higher-than-expected energy prices, attacks on grain shipments in the Black Sea and a particularly strong El Niño could trigger a food crisis, pushing more people into extreme poverty.
“Under an adverse scenario in which the risks materialise simultaneously, Brent crude could average 105 dollars per barrel in 2027, while food commodity prices could rise 12 per cent above the baseline forecast, exceeding their 2022 levels.”
The report also projected that global oil supply would fall by 5.2 per cent in 2026, the largest decline in more than four decades outside the 2020 global recession.
It said oil consumption was expected to decline by 2.5 per cent, marking the third-largest annual contraction on record after 2020 and 1980.
According to the report, high prices amid supply shortages are curbing demand, while electrification is also reducing oil consumption, particularly in China.
“In spite of the projected decline in consumption, oil production is expected to remain below demand, forcing further withdrawals from inventories and leaving global markets more vulnerable to additional supply disruptions.
“Fertiliser prices are forecast to increase by 14 per cent in 2026 following an early-year surge in urea prices, which has since eased. Prices are expected to return to their 2025 levels in 2027.”
It said metal prices are projected to rise by 25 per cent in 2026, reaching a new high as aluminium, copper and tin prices hit record levels.
“The increase reflects strong demand from investments in renewable energy, electric vehicles and data centres, alongside supply disruptions. Metal prices are expected to decline by three per cent in 2027.”
It said precious metal prices were also forecast to rise by 40 per cent in 2026 as demand for safe-haven assets remained elevated amid geopolitical and policy uncertainty.
“Although prices are expected to moderate in 2027, they are projected to remain more than three times their average level between 2015 and 2019.”
Reacting to the outlook, Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group, said higher energy costs and trade disruptions were driving up prices across a broad range of commodities.
“This is threatening to worsen inflation, food insecurity, and economic growth.
“The priority must be to protect the poorest people and support low-income countries already struggling with heavy debt burdens.”
Kose said the World Bank Group had made between 50 billion dollars and 60 billion dollars available through existing financing instruments, including 25 billion dollars in pre-arranged financing, to help countries manage the effects of higher prices.
He said the financing could support social safety nets for vulnerable populations, strengthen governments’ fiscal capacity and provide working capital and liquidity support for businesses and farms.
Kose said the institution had made substantial progress in accelerating and simplifying its ability to mobilise private capital alongside its own financing and knowledge services.
He said the bank was therefore well positioned to invest in the next generation of young people in333 developing countries, particularly by improving the conditions for job creation.
