Global commodity prices are projected to rise by 23 per cent in 2026, with energy costs expected to surge by 32 per cent and food prices facing further increases as conflict in the Middle East, disrupted grain shipments and climate risks tighten supplies, the World Bank Group has warned.

In its latest Commodity Markets Outlook, released yesterday, the institution said the shocks were driving up prices across major commodity markets, raising the risks of inflation, food insecurity and weaker economic growth.

The pressure is expected to persist into 2027, when food commodity prices are projected to rise by a further seven per cent, bringing the cumulative increase over 2026 and 2027 to about 18 per cent.

The outlook projected energy prices to reverse three consecutive years of declines, reaching a four-year high in 2026 before easing the following year. Brent crude oil is forecast to average $91 per barrel this year, up from $69 in 2025, before moderating to $79 in 2027.

The World Bank attributed the outlook largely to the Middle East conflict, which has depleted oil inventories and heightened the risk of further supply disruptions. It warned that falling stocks have left global markets more vulnerable to additional shocks, even as high prices begin to curb demand.

Food markets are also facing mounting pressure from disrupted grain shipments, the threat of El Niño to harvests and higher fuel and fertiliser costs. These factors are expected to push food commodity prices up by about 10 per cent in 2026 and another seven per cent in 2027, increasing the risk of reduced food affordability, particularly for vulnerable households.

The World Bank’s Deputy Chief Economist and Director of the Prospects Group, Avhan Kose, stated that commodity markets are being hit by several major shocks at once.

He revealed: “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. The priority must be to protect the poorest people and support low-income countries already struggling with heavy debt burdens.”

Although overall commodity prices are expected to fall by seven per cent in 2027, the institution cautioned that the projections depend on conflicts affecting global supplies not escalating significantly. A worsening of the Middle East conflict, alongside continued damage to Russia’s oil infrastructure, could push energy prices above current forecasts.

The report also warned that a combination of higher-than-expected energy prices, attacks on grain shipments in the Black Sea and an exceptionally strong El Niño could trigger a food crisis and push more people into extreme poverty, similar to the conditions experienced in the early 2010s.

Under this adverse scenario, Brent crude could average $105 per barrel in 2027, while food commodity prices could be 12 per cent higher than projected in the baseline forecast, surpassing their 2022 levels.

The pressure on energy supplies is already expected to produce a sharp contraction in global oil production. The World Bank projected global oil supply to fall by 5.2 per cent in 2026, the largest decline in more than four decades outside the 2020 global recession.

Oil consumption is also forecast to decline by 2.5 per cent, marking its third-largest annual contraction on record after 2020 and 1980. The report attributed the decline to high prices amid supply shortages, as well as growing electrification, particularly in China, which is reducing oil use.

However, production is expected to remain below consumption, forcing further withdrawals from existing oil stocks and leaving the market exposed to renewed supply disruptions.

Beyond energy and food, other commodity markets are also facing significant price increases. Fertiliser prices are projected to rise by 14 per cent in 2026 following an early-year surge in urea prices, which has since eased. Prices are expected to return to their 2025 levels in 2027.

Metal prices are forecast to rise by 25 per cent in 2026, reaching a new high as aluminium, copper and tin prices hit record levels. The gains reflect strong demand linked to investments in renewable energy, electric vehicles and data centres, alongside supply disruptions during the year. Metal prices are expected to decline by three per cent in 2027.

Precious metals are expected to record an even sharper increase, with prices projected to rise by 40 per cent in 2026 as investors continue to seek safe-haven assets amid geopolitical and policy uncertainty. Although prices are expected to moderate somewhat in 2027, they are projected to remain more than three times their 2015 to 2019 average.