Global Commodity Markets Face Unprecedented Shocks
The World Bank Group's latest Commodity Markets Outlook paints a stark picture for 2026, forecasting an extraordinary 23% surge in overall commodity prices. This increase would push prices to their second-highest level since 2013, driven by a confluence of geopolitical conflicts and severe weather events.
Key factors contributing to this projected spike include ongoing hostilities in West Asia, persistent conflict in the Black Sea region, and an exceptionally powerful El Niño weather pattern. While a modest retreat of 7% is anticipated for 2027, the immediate outlook signals significant global economic strain.
Energy Markets Under Severe Pressure
Energy supplies are experiencing historic disruption, primarily due to the conflict in the Middle East. Global oil inventories have been drawn down, and energy prices are expected to climb by 32% in 2026, reversing three consecutive years of decline. Brent crude oil is forecast to average $91 per barrel in 2026, a sharp increase from $69 in 2025.
This strain on energy markets is exacerbated by a projected 5.2% (5.5 million barrels per day) fall in global oil supply for 2026—the largest decline in over four decades outside of the 2020 global recession. European natural gas prices, heavily influenced by liquefied natural gas (LNG) imports, could spike by nearly 60% in 2026 due to restricted shipments through critical routes like the Strait of Hormuz.
Mounting Food and Agricultural Pressures
Food and agricultural commodity markets are grappling with their own set of challenges, including elevated energy and fertilizer input costs, trade disruptions in the Black Sea, and the severe impact of El Niño. Food commodity prices are on track to rise by 10% in 2026, followed by an additional 7% in 2027, culminating in an 18% cumulative increase over two years.
Grain prices alone are projected to jump 14% in 2026 and another 9% in 2027, largely due to adverse weather and reduced export flows from major breadbasket regions. The current El Niño episode, expected to be the strongest since 1950, poses significant threats to harvests of tropical commodities such as rice, palm oil, sugar, and coffee, particularly impacting Southeast Asian producers.
Metals and Minerals Reach New Highs
The World Bank also reports a historic trajectory for metals and minerals prices, set to scale a new peak with a 25% increase in 2026. Base metals like aluminum, copper, and tin have already hit record highs, fueled by robust structural demand from renewable energy infrastructure, electric vehicles, and data centers, alongside localized supply disruptions.
Furthermore, precious metals, including gold, silver, and platinum, are forecast to surge by 40% in 2026. This is primarily driven by heightened geopolitical and policy uncertainty, which fuels strong safe-haven demand for these assets.
Risks and World Bank Response
These baseline projections assume that regional conflicts do not intensify sharply and that shipping routes progressively stabilize. However, the risks are heavily skewed towards higher prices. An adverse scenario, involving re-escalating Middle East hostilities, persistent Russian infrastructure outages, and peaking El Niño impacts, could push Brent crude to $105 per barrel in 2027 and elevate food commodity prices beyond 2022 levels, severely exacerbating global inflation and food insecurity.
To assist vulnerable emerging markets and developing economies in managing these systemic shocks, the World Bank Group has made $50 billion to $60 billion available through existing instruments, prioritizing social safety nets, fiscal capacity, and economic resilience.