World Bank forecasts 23% surge in commodity prices in 2026

The World Bank has forecasted a 23 percent increase in global commodity prices for 2026 due to disruptions in oil supplies caused by conflict in the Middle East, alongside shipping disruptions and weather risks impacting food production. Energy prices are expected to rise by 32 percent this year, reversing three years of declines, before moderating in 2027.

Food commodity prices are predicted to increase by about 10 percent in 2026 and another 7 percent in 2027, a 18 percent rise, due to conflict disrupting grain shipments, El Niño threatening harvests, and high fuel and fertilizer prices raising agricultural costs.

The World Bank warns that the outlook remains vulnerable to further supply disruptions, particularly if the Middle East conflict escalates or damage to Russia's oil infrastructure continues. The institution has cautioned that projections assume no major escalation of conflicts affecting commodity supplies. If worsened, these risks could push energy prices above the forecast and intensify pressure on food markets.

Brent crude could average $105 per barrel in 2027 while food commodity prices may be 12 percent above the baseline forecast, surpassing their 2022 levels.

Ayhan Kose, the World Bank's Deputy Chief Economist and Director of the Prospects Group, emphasized the several major shocks affecting commodity markets, citing higher energy costs and trade disruptions driving up prices across a broad range of commodities. This could worsen inflation, food insecurity, and economic growth. The World Bank has made between $50bn and $60bn available through existing financing instruments to support vulnerable populations, strengthen government fiscal capacity, and provide working capital and liquidity support for businesses and farms.