World Bank Sees Commodity Prices Rising 23% in 2026 as Energy and Food Costs Climb
Key Facts
The World Bank expects overall commodity prices to rise 23% in 2026, before falling 7% in 2027, reflecting simultaneous shocks in energy, food and fertilizer markets. The bank published its forecasts on October 28, saying higher energy costs and trade disruption are driving prices higher across a broad range of commodities. Ayhan Kose, the bank’s deputy chief economist, said these pressures threaten to worsen inflation and food insecurity and weaken economic growth. This means the price surge is not confined to a single market, but extends to production inputs, food and energy. The baseline forecast assumes no major escalation in conflicts affecting global commodity supplies.
Energy is expected to account for the largest part of the increase; the bank expects energy prices to rise 32% in 2026, reversing three years of declines, before moderating in 2027. It estimated the average Brent crude price at $91 a barrel in 2026, compared with $69 in 2025, then forecast a decline to $79 in 2027. These estimates follow a monthly jump in September, when the energy price index rose 25.7%, crude oil climbed 21.2% and natural gas increased 15.3%. September’s data show the scale of the move preceding the annual forecasts, while Brent’s trajectory indicates that the expected average price in 2026 will remain above its level the previous year. The bank links higher energy prices to broader pressure on commodity and trade costs.
In the oil market, the bank expects global supply to fall 5.2% in 2026, the largest decline in more than four decades, excluding the global recession in 2020. At the same time, consumption is expected to decline 2.5% during the year, pointing to simultaneous decreases in both supply and demand. The estimate reflects the market’s sensitivity to supply disruptions at a time of rising energy prices, while the bank’s outlook remains tied to its assumption that conflicts will not escalate significantly. The bank said energy prices could rise further if the conflict in the Middle East escalates and damage to Russian oil infrastructure continues. These risks leave the path for supply and crude prices vulnerable to moving away from the baseline scenario.
For food, the bank expects food commodity prices to rise about 10% in 2026, followed by a further 7% increase in 2027, bringing the cumulative rise to 18% over the two years. The bank attributed this outlook to disruptions to grain shipments, the threat El Niño poses to crops, and higher fuel and agricultural fertilizer costs. In September, food prices rose 3.8%, while fertilizer prices increased just 0.4%, according to the bank’s monthly data. The modest fertilizer increase that month contrasts with the bank’s forecast that prices will rise 14% in 2026, after a jump in urea prices early in the year later eased. The bank expects fertilizer prices to return to 2025 levels in 2027, making agricultural input costs an important part of the food outlook.
For metals, the bank expects precious metals prices to rise 40% in 2026, with demand for safe-haven assets remaining high amid geopolitical and policy uncertainty. It also noted that links between price volatility across commodity groups become clearer during periods of economic or market stress, including the period following the start of the current conflict in the Middle East. It identified industrial metals as the largest average channel through which price volatility spreads to other commodity groups, with the role of oil prices increasing markedly after the conflict began. These links highlight how movements in one market can spread to others during periods of turmoil. This places metals and energy within an interconnected picture of commodity price volatility, alongside food and supply shocks.
In a downside scenario in which the risks materialize, Brent crude could average $105 a barrel in 2027, and food commodity prices could rise 12% above the baseline forecast. The bank links this possibility to an escalation of the conflict in the Middle East and continued damage to Russian oil infrastructure, while its baseline forecast assumes no major escalation in conflicts affecting commodity supplies. The World Bank announced that it has made $50 billion to $60 billion in financing and support available through its existing instruments to address the effects of higher prices. This includes $25 billion in prearranged financing. The bank set November 3, 2026, as the date for its next monthly commodity price update.