Global commodity prices to rise 23 percent in 2026 as conflicts fuel supply disruptions – World Bank

WASHINGTON, October 29, 2026 – Global commodity prices are projected to rise by 23 percent in 2026, driven by escalating geopolitical tensions, energy supply disruptions and growing threats to agricultural production, according to the World Bank Group’s latest Commodity Markets Outlook report.

The report warns that the ongoing conflict in the Middle East, disruptions to grain shipments and the looming threat of El Niño could push energy and food prices higher, worsening inflation, food insecurity and economic pressures, particularly in developing countries.

According to the World Bank, energy prices are forecast to increase by 32 percent in 2026, reversing three consecutive years of declines, before moderating in 2027.

Brent crude oil prices are expected to average US$ 91 per barrel in 2026, up from US$ 69 in 2025, before declining to US$ 79 in 2027.

The report attributes the sharp increase to supply disruptions linked to the Middle East conflict, which have depleted global oil inventories and left markets increasingly vulnerable to further shocks.

Food commodity prices are also projected to rise by 10 percent in 2026 and a further 7 percent in 2027, representing a cumulative increase of approximately 18 percent.

The anticipated increases are largely attributed to disruptions in grain shipments, adverse weather conditions associated with El Niño, and rising fuel and fertiliser costs, which are pushing up agricultural production expenses.

Overall, commodity prices are expected to decline by 7 percent in 2027, provided geopolitical tensions do not intensify and major supply disruptions ease.

However, the World Bank cautions that an escalation of the Middle East conflict, continued damage to Russia’s oil infrastructure and further disruptions to Black Sea grain shipments could significantly worsen the outlook.

Under an adverse scenario in which these risks materialise simultaneously, Brent crude oil prices could average US$ 105 per barrel in 2027, while food commodity prices could rise 12 percent above baseline projections, surpassing their 2022 levels.

The institution warns that such developments could trigger another global food crisis, pushing more people into extreme poverty, particularly in low-income countries already struggling with high debt burdens.

“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group.

“Higher energy costs and trade disruptions are driving up prices across a broad range of commodities, 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.”

To help countries respond to the rising costs, the World Bank Group says it has made between US$ 50 billion and US$ 60bln available through existing financing instruments, including US$ 25bln in pre-arranged financing.

The funds are intended to strengthen social protection programmes, support vulnerable households, improve governments’ fiscal capacity and provide working capital and liquidity support to businesses and agricultural enterprises.

The institution is also stepping up efforts to mobilise private capital alongside its own financing to support investment, economic resilience and job creation, particularly for young people in developing countries.

Meanwhile, the report projects that global oil supply will decline by 5.2 percent in 2026, marking the largest contraction in more than four decades outside the 2020 global recession.

Global oil consumption is also expected to fall by 2.5 percent, representing the third-largest annual contraction on record after those recorded in 2020 and 1980.

The decline in consumption is being driven by higher prices, supply shortages and increased electrification, particularly in China.

Despite weakening demand, global oil production is expected to remain below consumption, forcing countries to draw further on existing inventories and increasing the risk of additional price volatility.

The report further projects that fertiliser prices will increase by 14 percent in 2026, following a sharp rise in urea prices earlier in the year, before returning to 2025 levels in 2027.

The increase in fertiliser costs is expected to add pressure on agricultural producers, particularly smallholder farmers in developing economies, where access to affordable farm inputs remains a major challenge.

In the metals market, prices are forecast to increase by 25 percent in 2026, reaching new highs as aluminium, copper and tin prices surge to record levels.

The World Bank attributes the increases to strong demand associated with investments in renewable energy, electric vehicles and data centres, coupled with supply disruptions.

However, metals prices are projected to decline by 3 percent in 2027 as market conditions stabilise.

Precious metals prices are expected to rise by 40 percent in 2026, supported by sustained demand for safe-haven assets amid geopolitical tensions and uncertainty surrounding global economic policies.

Although prices are expected to moderate in 2027, they are projected to remain more than three times their average levels recorded between 2015 and 2019.

The report also highlights the growing interconnectedness of global commodity markets, warning that price shocks affecting one commodity can increasingly spread to others, particularly during periods of economic and geopolitical instability.

Its special analysis finds that industrial metals transmit the greatest price volatility to other commodity groups on average, although oil has become a more significant driver of volatility since the outbreak of the current Middle East conflict.

The World Bank warns that the growing links between commodity markets could amplify the impact of future supply disruptions, making it increasingly difficult for countries to shield their economies from global price shocks.

The findings underscore the need for governments, particularly in developing countries, to strengthen social protection systems, improve economic resilience and adopt measures to cushion vulnerable populations against rising energy and food costs.

https://thecooperator.news/world-bank-chief-calls-for-urgent-action-to-close-800mln-jobs-gap/

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