World Bank sees commodity prices surging 23% in 2026 on Middle East war

ETMarkets.com

The increase marks a broad based shock to commodity markets, with energy, food and metals prices all rising sharply this year. The World Bank warned that a further escalation in the Middle East conflict, along with continued damage to Russian oil infrastructure, could push energy prices even higher.

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Energy shock drives broader commodity surge

Global energy prices are projected to rise 32% in 2026, reaching their highest level since Russia's invasion of Ukraine in 2022, the World Bank said in its latest Commodity Markets Outlook, according to Reuters.

Global oil supply is expected to fall 5.2% this year, its biggest decline in four decades outside the 2020 global recession. Brent prices are projected to average $92 a barrel, although the impact has been partly offset by a 2.5% decline in oil demand.

"Commodity markets are being hit by several major shocks at once," said Ayhan Kose, the World Bank’s deputy chief economist. "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."

Food and metals face fresh risks

Food commodity prices are expected to rise just over 10% this year as fighting disrupts grain shipments in the Black Sea. Prices could rise another 7% or more in 2027, taking the cumulative increase to nearly 18%, Reuters reported.

The World Bank also warned that a record El Niño, further Black Sea disruptions and an escalation in the Middle East could push food prices 12% above current expectations, potentially reviving the kind of food crisis seen in the early 2010s.

Metals prices are projected to rise 25% in 2026, with aluminium, copper and tin reaching new highs amid supply disruptions and demand from renewable energy, electric vehicles and data centres. Precious metals prices are expected to surge 40% as investors seek safe haven assets amid geopolitical and policy uncertainty, according to the World Bank report cited by Reuters.

The World Bank expects commodity prices to ease 7% in 2027, but warned that fresh supply shocks could keep inflationary pressures elevated, Reuters reported.