The World Bank Group has released its latest Commodity Markets Outlook, which forecasts that commodity prices will increase by 23 percent before the end of 2026. This rise is attributed to intensifying global shocks, including the conflict in the Middle East, which has reduced oil inventories and is expected to push energy prices to their highest level in four years. The report also highlights the disruption of cereal shipments and the El Niño phenomenon as threats to harvests and food affordability.
Energy prices are projected to rise by 32 percent in 2026, after three years of declines, before moderating in 2027. The price of 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. The World Bank Group notes that the conflict in the Middle East and damage to Russia's oil infrastructure could lead to further increases in energy prices. Additionally, the report warns that higher-than-expected energy prices, attacks on grain shipments, and a severe El Niño phenomenon could combine to cause a food crisis.
The World Bank Group has made between US$50 billion and US$60 billion available through existing instruments to help countries manage the consequences of rising prices. This includes US$25 billion in pre-arranged financing to support social safety nets for the most vulnerable, expand fiscal capacity, and provide working capital and liquidity support to businesses and farms. The institution has also made progress in accelerating and simplifying its ability to mobilize private capital alongside its own financing and knowledge services.
The report highlights that 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. High prices and electrification are dampening demand, particularly in China.
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. Metal prices are forecast to reach a new high in 2026, with a 25 percent increase, driven by strong demand generated by investments in renewable energy, electric vehicles, and data centers. Precious metals prices are projected to rise by 40 percent in 2026, as demand for safe-haven assets remains elevated amid geopolitical and regulatory uncertainty.
The special chapter of the report examines the interconnectedness of commodity markets and concludes that the links between commodity price volatility become more pronounced in periods of economic stress or market difficulties. 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.
Ayhan Kose, Deputy Chief Economist and Director of the World Bank's Prospects Group, emphasized that commodity markets are simultaneously affected by several major shocks, including higher energy costs and disruptions in trade. He stressed that the priority must be to protect the poorest people and support low-income countries that are already burdened by heavy debt burdens.
Key points
- Commodity prices are projected to rise by 23 percent in 2026 before falling by 7 percent in 2027.
- Energy prices are expected to rise by 32 percent in 2026, driven by the conflict in the Middle East and other global shocks.
- The World Bank Group has made between US$50 billion and US$60 billion available to help countries manage the consequences of rising prices.
