World Bank sees commodity prices up 23% in 2026 due to Middle East war, other shocks

Global commodity prices are anticipated to increase by 23% in 2026, according to the World Bank's latest assessment. The surge is attributed to a combination of factors, including rising energy prices, disruptions to cargo shipping due to the Middle East conflict, grain shipment issues in the Black Sea, and heightened demand for safe-haven assets like gold.

The World Bank's Commodity Markets Outlook highlights the sharp increase in prices for oil, natural gas, food, and metals throughout the year, driven by mounting global shocks. Should the Middle East conflict escalate and damage Russian oil infrastructure persist, the situation could deteriorate further. Commodity prices are expected to decrease by 7% in the following year, but continued shocks, such as the worst El Niño weather event since 1950, could sustain elevated food commodity prices, potentially exacerbating inflation and monetary policy tightening.

The global economy is presently more susceptible to future supply disruptions. The Middle East war has depleted global oil reserves, with global oil supply projected to decline by 5.2% in 2026, the steepest decrease in four decades, excluding the 2020 recession. According to Ayhan Kose, the World Bank's deputy chief economist, "Commodity markets are grappling with multiple major shocks simultaneously," as higher energy costs and trade disruptions drive up prices across a wide range of commodities, potentially exacerbating inflation, food insecurity, and economic growth.

The World Bank's report, published twice annually, comes as foreign ministers from the world's 20 largest economies convene in Atlanta, Georgia, to address the conflicts in the Middle East and Ukraine. The bank has allocated $8.7 billion in low-cost loans and aid to 25 countries impacted by the Middle East conflict, including 10 countries that adapted existing programs to address crisis-related expenses and 19 that accessed new resources, utilizing a combination of both approaches.