Global commodity prices are projected to rise by 23% in 2026 as escalating conflict in the Middle East disrupts energy supplies, accelerates oil inventory drawdowns and increases pressure on global food security, according to the World Bank Group’s latest Commodity Markets Outlook, released on Wednesday.
The report forecasts a 32% increase in energy prices this year, reversing three consecutive years of declines. Food commodity prices are expected to rise by approximately 10%, driven by disrupted grain shipments, the threat of El Niño and higher fuel and fertilizer costs that could weigh on agricultural production.
Although overall commodity prices are projected to decline by 7% in 2027, the World Bank warned that further geopolitical escalation could push energy and food prices significantly above its baseline forecasts.
Brent crude oil is expected to average $91 per barrel in 2026, up from $69 in 2025, before easing to $79 in 2027. The projected increase would take energy prices to their highest level in four years.
“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank’s deputy chief economist and director of its Prospects Group.
He warned that rising energy costs and trade disruptions were driving up prices across commodity markets, increasing inflationary pressures, worsening food insecurity and weighing on economic growth. Kose also stressed the importance of protecting vulnerable populations and supporting low-income countries facing substantial debt burdens.
Oil Supply Disruptions Threaten Food Affordability
The conflict is reshaping global energy production and consumption, with worldwide oil supply projected to contract by 5.2% in 2026. Excluding the 2020 global recession, this would represent the largest annual decline in more than four decades.
Global oil consumption is also forecast to fall by 2.5%, marking its third-largest annual decline on record after 2020 and 1980. Supply shortages and elevated prices are expected to curb demand, while electrification continues to reduce oil consumption, particularly in China.
Despite weaker demand, oil production is projected to remain below consumption, forcing further withdrawals from inventories and leaving markets increasingly vulnerable to additional supply disruptions.
Food commodity prices are forecast to increase by around 10% in 2026 and another 7% in 2027, resulting in a cumulative rise of approximately 18% over the two years.
The World Bank cautioned that higher fuel and fertilizer costs could compound the effects of disrupted grain shipments and adverse weather conditions, making agricultural production more expensive and putting food affordability under further pressure.
Fertilizer prices are expected to rise by 14% in 2026, following a sharp increase in urea prices early in the year, before returning to their 2025 levels in 2027.
Further Escalation Could Push Oil Above $100 a Barrel
The World Bank’s baseline projections assume there will be no major escalation in conflicts disrupting global commodity supplies.
However, energy prices could climb further if hostilities in the Middle East intensify and damage to Russian oil infrastructure persists.
Under a more adverse scenario, a combination of higher energy prices, attacks on Black Sea grain shipments and a severe El Niño event could trigger a food crisis, pushing more people into extreme poverty.
In this scenario, Brent crude could average $105 per barrel in 2027, while food commodity prices could rise to levels 12% above the baseline forecast, exceeding those recorded in 2022.
To help countries manage the economic impact of rising prices, the World Bank said it has made between $50 billion and $60 billion available through existing financing instruments, including $25 billion in pre-arranged financing.
The resources can be used to strengthen social safety nets for vulnerable households, support government fiscal capacity and provide working capital and liquidity to businesses and agricultural producers.
The institution is also working to accelerate and simplify arrangements for mobilizing private capital alongside its financing and advisory services.
Industrial and Precious Metals Prices Set to Rise
Industrial metals prices are projected to increase by 25% in 2026, reaching a new high as aluminium, copper and tin prices hit record levels.
The anticipated increase reflects robust demand associated with renewable energy investments, electric vehicles and data centres, alongside supply disruptions. Industrial metals prices are expected to decline by 3% in 2027.
Precious metals prices are forecast to rise by 40% in 2026 as geopolitical tensions and policy uncertainty sustain demand for safe-haven assets. Although prices are expected to moderate in 2027, they are projected to remain more than three times their average level during 2015–2019.
A special section of the World Bank report examines how price volatility spreads between commodity markets. The analysis finds that connections between price fluctuations strengthen during periods of economic and market stress, including since the outbreak of the latest Middle East conflict.
Industrial metals are the largest average source of volatility transmitted to other commodity groups, while the influence of oil prices on other markets has increased significantly since the conflict began.
The findings highlight the broader economic consequences of geopolitical disruptions, with rising commodity prices posing risks to inflation, food affordability, industrial production and global growth. The outlook will depend heavily on developments in energy supplies, trade routes and regional security, as well as the ability of governments to protect vulnerable households from further price shocks.
