Commodity prices will rise by 23 percent before the end of 2026.
This is because global shocks intensify, according to the latest edition of the World Bank Group’s Commodity Markets Outlook.
The conflict in the Middle East has reduced oil inventories and is expected to push energy prices to their highest level in four years.
Meanwhile, the disruption of cereal shipments and the El Niño phenomenon threaten harvests and food affordability.
With oil stocks depleted, the world is more exposed to further supply shocks.
As countries respond to these challenges, the World Bank Group makes financing and support available through its existing instruments while expanding its capacity to mobilize private capital alongside its own resources.
Energy prices are projected to rise by 32 percent in 2026, after three years of declines, before moderating in 2027.
Brent oil is forecast to average US$91 a barrel in 2026, up from US$69 in 2025, before falling to US$79 in 2027.
In addition, prices of staple foods are expected to rise by about 10 per cent in 2026 and a further 7 per cent in 2027 – a cumulative increase of 18 per cent – as conflict disrupts grain shipments, El Niño threatens harvests, and high fuel and fertilizer prices drive up agricultural costs.
Overall, commodity prices will rise by 23 percent this year, before falling by 7 percent in 2027.
These projections assume that there will be no major escalation of conflicts affecting the global supply of commodities.
However, energy prices could rise further if the conflict in the Middle East escalates and damage to Russia’s oil infrastructure persists.
At the same time, higher-than-expected energy prices, attacks on grain shipments in the Black Sea and a very intense El Niño phenomenon could combine to cause a food crisis that pushes more people into extreme poverty, such as the one experienced in the early 2010s.
In an adverse scenario in which these risks materialize together, Brent could reach an average of US$105 per barrel in 2027, and prices of basic foodstuffs could be 12 percent higher than expected in the baseline forecasts, exceeding their 2022 level.
“Commodity markets are simultaneously affected by several major shocks,” said Ayhan Kose, Deputy Chief Economist and Director of the World Bank’s Prospects Group.
“Higher energy costs and disruptions in trade are driving up prices of various commodities, which could exacerbate inflation and food insecurity, and slow economic growth. The priority must be to protect the poorest people and support low-income countries that are already burdened by heavy debt burdens.”
To help countries manage the consequences of rising prices, the World Bank Group has made between US$50 billion and US$60 billion available through existing instruments, including US$25 billion in pre-arranged financing.
These funds can support social safety nets for the most vulnerable, expand fiscal capacity, and provide working capital and liquidity support to businesses and farms.
At the same time, the institution has made considerable progress in accelerating and simplifying its ability to mobilize private capital along with its own financing and knowledge services.
As a result, the World Bank Group is well positioned to invest in the next generation of young people in developing countries, including by improving the conditions for job creation.
Conflicts are forcing adjustments to be made in the way the world produces and consumes energy.
Global oil supply is projected to decline by 5.2 percent in 2026, the biggest drop in more than four decades, not including the global recession of 2020.
Meanwhile, consumption is forecast to decline by 2.5 percent, the third-largest annual contraction on record, after those of 2020 and 1980.
High prices in a context of tight supply are dampening demand, while electrification is also reducing oil consumption, particularly in China. Even so, production remains below consumption, forcing oil to be extracted from reserves again and leaving markets more exposed to further disruptions.
Fertilizer prices are forecast to rise by 14 percent in 2026, following a rise in urea prices at the beginning of the year that has since moderated, before returning to 2025 levels in 2027.
In addition, metal prices are forecast to reach a new high in 2026, with a 25 percent increase, as aluminum, copper, and tin prices will record levels.
These increases reflect strong demand generated by investments in renewable energy, electric vehicles and data centers, along with supply disruptions this year.
Prices are expected to fall by 3 percent in 2027.
Precious metals prices are projected to rise by 40 percent in 2026, as demand for safe-haven assets remains elevated amid an environment of geopolitical and regulatory uncertainty.
These prices are projected to moderate slightly in 2027 but will still be more than three times higher than their 2015-19 average.
The special chapter of the report examines the interconnectedness of commodity markets, that is, the extent to which changes in the price of one product can be explained by price shocks in other products.
It concludes that the links between commodity price volatility become more pronounced in periods of economic stress or market difficulties, even since the onset of the current conflict in the Middle East. Industrial metals are, on average, the most volatile to other commodity groups, although the role of oil prices increased markedly after the start of the conflict in the Middle East.
