Global commodity markets are facing significant pressure as prices of oil, natural gas, food and metals have climbed amid growing geopolitical tensions and supply disruptions, according to the World Bank’s latest Commodity Markets Outlook.
The bank warned that the situation could deteriorate further if the conflict in the Middle East escalates and damage to Russian oil infrastructure continues.
Although overall commodity prices are projected to decline by 7 per cent next year, persistent supply disruptions and the possibility of the strongest El Niño weather phenomenon since 1950 could keep food prices high. This could intensify inflationary pressures and prompt central banks to maintain tighter monetary policies.
The World Bank cautioned that the global economy has become increasingly vulnerable to supply shocks. Oil inventories have been depleted during the Middle East conflict, while global oil supplies are forecast to fall by 5.2 per cent in 2026. Outside the 2020 global recession, this would represent the sharpest annual decline in four decades.
“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank’s deputy chief economist. He warned that rising energy costs and trade disruptions were pushing up prices across multiple commodity markets, threatening inflation, food security and economic growth.
The bank released its twice-yearly report ahead of a meeting of foreign ministers from the Group of 20 major economies in Atlanta, Georgia, where the conflicts in the Middle East and Ukraine are expected to be key discussion points.
Kose said the institution was prioritising assistance for the world’s poorest populations and supporting low-income countries already struggling with substantial debt burdens.
According to the report, the World Bank had provided $8.7 billion in concessional loans and other assistance to 25 countries adversely affected by the Middle East conflict. Ten countries had adjusted existing programmes to meet crisis-related costs, while 19 had accessed additional resources, with some receiving support through both channels.
Global energy prices rose by 32 per cent in 2026, reaching their highest levels since Russia’s invasion of Ukraine in 2022, the report said.
With oil production under pressure, Brent crude prices are expected to remain elevated in the near term, averaging $92 per barrel for the year. The increase could have been greater if oil demand were not projected to decline by 2.5 per cent in 2026. That would mark the third-largest annual drop on record, behind the Covid-19 shock in 2020 and the oil crisis of 1980.
Food commodity prices are projected to increase by slightly more than 10 per cent in 2026, partly because of disruptions to grain shipments linked to hostilities between Russia and Ukraine in the Black Sea. Prices could rise by a further 7 per cent or more in 2027, resulting in a cumulative increase of nearly 18 per cent.
The World Bank warned that a combination of extreme El Niño conditions, additional Black Sea grain shipment disruptions, an escalation of the Middle East conflict and continued damage to Russian oil infrastructure could push food prices 12 per cent above current projections.
Such a scenario could trigger a food crisis comparable to the one experienced in the early 2010s, when more than 40 million additional people were pushed into extreme poverty.
Fertiliser prices are forecast to rise by 14 per cent in 2026, driven primarily by a sharp increase in urea prices, before returning to 2025 levels in 2027.
Metal prices are projected to increase by 25 per cent in 2026, reaching a new record high. Aluminium, copper and tin are expected to set fresh records amid supply disruptions and robust demand linked to renewable energy projects, electric vehicles and data centres.
Precious metal prices are forecast to surge by 40 per cent in 2026 as investors seek safer assets amid geopolitical tensions and uncertainty over economic policies. The World Bank expects prices in this category to moderate somewhat in 2027.
