Global commodity prices are expected to increase by 23% in 2026. The ongoing conflict in the Middle East has pushed energy prices to their highest level in four years, while food supply disruptions and El Nino threaten to worsen food insecurity.
The World Bank said in its latest ‘Commodity Markets Outlook’ report released on Wednesday that dwindling oil inventories have increased the risk of further supply-related shocks to the world. It is estimated that commodity prices will decline by 7 percent overall in 2027.
Ayhan Kos, Deputy Chief Economist at the World Bank and Director of the Prospects Group, said that commodity markets are experiencing several major shocks at once. He said that due to increase in energy costs and disruption of trade, the prices of many commodities are increasing. This can worsen inflation, food insecurity and economic growth.
Energy prices at four-year high
It is estimated that energy prices will increase by 32 percent in 2026, reversing the decline of the past three years. After this, prices may moderate slightly in 2027. Brent crude is projected to average $91 per barrel this year, up from $69 in 2025. It is expected to drop to $79 per barrel in 2027.
Global oil supply is expected to decline by 5.2% in 2026. Barring a global recession in 2020, this would be the biggest decline in more than four decades. Oil consumption is also expected to decrease by 2.5 percent. This would be the third largest annual decline on record, behind 2020 and 1980. Oil production is still lower than consumption, forcing further withdrawals from oil reserves.
According to an AFP report, energy and fertilizer prices have soared since the US and Israel launched a war against Iran in late February. According to an AFP report, Iran has almost closed the ‘Strait of Hormuz’ (Strait of Hormuz), a major route for transporting oil, gas and petroleum. The report also said that this new estimate by the World Bank is much higher than the estimate made in April.
Pressure on food prices
Food prices are expected to increase by about 10 percent in 2026 and 7 percent in 2027, for an overall increase of 18 percent. The World Bank says the conflict is disrupting grain supplies, putting ‘El Nino’ crops at risk and raising the cost of farming due to high fuel and fertilizer prices. There was a sharp jump in urea prices at the beginning of the year, which later came down slightly. Khas prices are now expected to increase by 14 percent in 2026. It is expected that these prices will return to 2025 levels by 2027.
Fear of food crisis
These projections assume that conflicts affecting the supply of goods will not become more severe. If conflict in the Middle East escalates and Russia’s oil infrastructure continues to suffer, energy prices could rise further. According to the World Bank, high energy prices, attacks on grain shipments through the Black Sea and a very severe ‘El Nino’ could cause food crises. This could push more people into extreme poverty in the early 2010s. In such a worst-case scenario, the average price of Brent crude could reach $105 per barrel in 2027. Also, food prices are likely to be 12 percent higher than the baseline estimate, surpassing the 2022 level as well.
Metal prices at record levels
Metals prices are projected to increase by 25 percent in 2026, with aluminum, copper and tin all hitting record highs. The World Bank says this is due to massive demand and supply disruptions from renewable energy, electric vehicles and data centers this year. Metal prices are expected to decline by 3% in 2027. Precious metals prices are expected to rise 40 percent by 2026, as they remain in demand as safe-haven assets amid geopolitical and policy uncertainty. This may decrease slightly in 2027, but will still be more than three times the 2015-19 average.
Help for poor countries
The World Bank Group has made $50 billion to $60 billion available through its existing instruments, including a pre-arranged loan of $25 billion. This can fund social safety nets, increase financial capacity and provide working capital and liquidity to companies and the agricultural sector. Since the conflict in the Middle East began, the World Bank has provided $8.7 billion in emergency assistance to vulnerable countries.
Kos said the priority should be protecting the poorest and helping low-income countries, which are “already struggling with heavy debt burdens. The report also looked at how deeply linked commodity markets are. It found that price movements become stronger during times of economic or market stress. This has also been seen since the conflict in the Middle East. On average, industrial metals prices have been hit the hardest. The role of oil prices has become very important since the conflict began. has gone
