The World Bank has projected a 23 per cent increase in global commodity prices in 2026, warning that the Middle East conflict, shipping disruptions and adverse weather conditions could drive up energy and food costs worldwide.
The forecast, contained in the bank’s latest Commodity Markets Outlook released on Wednesday, indicated that energy prices could rise by 32 per cent this year, reversing three consecutive years of decline, before easing in 2027.
The institution also projected food commodity prices to increase by about 10 per cent in 2026 and a further seven per cent in 2027, representing a cumulative rise of 18 per cent over the two years.
It attributed the anticipated increase to disruptions to grain shipments, the threat of an El Niño weather pattern to harvests, and higher fuel and fertiliser costs facing farmers.
The World Bank said overall commodity prices could decline by seven per cent in 2027, but warned that the outlook remained uncertain amid the risk of further disruptions to global supplies.
It noted that a further escalation of the Middle East conflict or continued damage to Russia’s oil infrastructure could push energy prices beyond current projections and worsen pressure on food markets.
The report warned that a combination of higher energy prices, attacks on Black Sea grain shipments and a severe El Niño could trigger a major food crisis.
Under such a scenario, Brent crude oil could average $105 per barrel in 2027, while food commodity prices could rise 12 per cent above the baseline forecast, surpassing levels recorded in 2022.
The World Bank’s Deputy Chief Economist and Director of the Prospects Group, Ayhan Kose, said several major shocks were affecting commodity markets simultaneously.
“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,” Kose said.
He urged governments and development partners to prioritise support for vulnerable populations and low-income countries struggling with heavy debt burdens.
To help countries cope with rising costs, the World Bank Group said it had made between $50bn and $60bn available through existing financing instruments, including $25bn in pre-arranged financing.
The funding could be used to strengthen social safety nets, improve governments’ fiscal capacity and provide working capital and liquidity support for businesses and agricultural producers.
The bank also highlighted efforts to simplify and accelerate the mobilisation of private investment, alongside its financing and advisory services, particularly to improve job creation opportunities for young people in developing countries.
On energy markets, the report projected a 5.2 per cent decline in global oil supply in 2026, the sharpest fall in more than four decades outside the 2020 global recession.
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Oil consumption was also forecast to fall by 2.5 per cent, representing the third-largest annual contraction on record after 2020 and 1980.
According to the bank, higher prices and supply shortages were restraining demand, while electrification was contributing to lower oil consumption, particularly in China.
However, with production expected to remain below consumption, global markets could draw further on existing oil inventories, leaving supplies more exposed to additional disruptions.
Fertiliser prices are projected to rise by 14 per cent in 2026 following an early-year surge in urea prices, although the bank expects prices to return to their 2025 levels in 2027.
Metal prices are expected to climb by 25 per cent this year, reaching a new high as aluminium, copper and tin prices benefit from demand linked to renewable energy investments, electric vehicles and data centres, alongside supply disruptions.
The report projected metal prices to fall by three per cent in 2027.
Precious metal prices are forecast to increase by 40 per cent in 2026 as investors seek safer assets amid geopolitical tensions and policy uncertainty. Although prices are expected to moderate next year, they are projected to remain more than three times their average level between 2015 and 2019.
The report’s special analysis also examined how price shocks in one commodity market could affect other markets.
It found that links between commodity price volatility tend to strengthen during periods of economic and market stress, including since the outbreak of the latest Middle East conflict.
Industrial metals were identified as the largest average source of volatility transmitted to other commodity groups, although the influence of oil prices increased significantly after the conflict began.