World Bank sees commodity prices up 23% in 2026 due to Middle East war, other shocks

Commodity prices are the market prices paid for basic raw materials used across economies. They include energy such as oil and natural gas, food and grains, fertilizer, industrial metals, and precious metals such as gold. Their movements matter because they affect transport, farming, manufacturing, household costs, and inflation.

The World Bank expects several groups to become more expensive in 2026. Energy prices are projected to rise 32%, food prices just over 10%, fertilizer prices 14%, metals prices 25%, and precious metals prices 40%. The report links these increases to war, shipping disruptions, supply problems, and demand for safe-haven assets.

The broad commodity-price increase is expected to reach 23% in 2026. Precious metals are projected to rise the most, followed by industrial metals, energy, fertilizer, and food. Prices could remain vulnerable if Middle East fighting expands, Russian oil infrastructure damage continues, or weather harms harvests.

The World Bank forecasts a 23% increase in global commodity prices in 2026. That is a broad and unusually large movement across markets, rather than a rise limited to one product. It matters because commodities feed directly into energy bills, food costs, industrial production, and inflation.

Precious metals are projected to rise the most, surging 40%. Metals are next, with a projected 25% increase. Energy prices are expected to climb 32%, fertilizer 14%, and food prices just over 10%. The figures reflect different pressures, including geopolitical uncertainty, constrained supplies, disrupted trade, and investment demand.

The strongest increase in precious metals is linked to demand for safe-haven assets such as gold. Metals are supported by supply disruptions and investment in renewable energy, electric vehicles, and data centers. Food and fertilizer increases could be especially damaging because they raise farming costs and threaten food security.

War-related damage and disrupted shipping reduce the amount of commodities that can reach buyers. Fighting in the Middle East has raised energy prices and disrupted cargo shipping. Hostilities between Russia and Ukraine have also interfered with grain shipments through the Black Sea. These shocks make normal trade slower, riskier, and more expensive.

Oil shows the clearest mechanism. Global oil stocks have been depleted during the Middle East war, while damage to Russian oil infrastructure threatens production. The World Bank expects global oil supply to fall 5.2% in 2026, the largest drop in four decades outside the 2020 global recession. Brent oil is expected to average $92 per barrel.

When supply falls, available cargoes become scarcer. Buyers then compete for fewer shipments, pushing prices higher. The effects spread beyond oil and grains because energy and transport are used throughout the economy. Further escalation or continuing infrastructure damage could make the pressure worse.

Higher energy prices raise transport and production costs across the economy. Food and fertilizer increases then make meals and farming more expensive. The World Bank warns that these pressures could worsen inflation, food insecurity, and economic growth, while encouraging tighter monetary policy that can make borrowing harder.

The chain is direct. Disrupted grain shipments raise food prices, while higher fertilizer costs increase farmers’ expenses. An adverse combination of record El Niño conditions, more Black Sea disruption, Middle East escalation, and continued Russian oil infrastructure damage could push food prices 12% above expectations. That would squeeze households and producers at the same time.

The report compares this risk with the early 2010s, when a food crisis pushed more than 40 million additional people into extreme poverty. Poorer countries are especially exposed because many already face heavy debt burdens. The World Bank has provided $8.7 billion in aid and low-cost loans to 25 affected countries.

A 7% decline would be a retreat from the 2026 peak, not necessarily a return to earlier prices. Commodity markets could remain expensive if supply stays damaged or new disruptions appear. The World Bank specifically warns that continued shocks could keep food commodity prices elevated.

Several risks could work together. A severe El Niño could damage harvests, while further Black Sea grain disruptions would restrict food shipments. Escalation in the Middle East could raise energy and shipping costs, and continued damage to Russian oil infrastructure could reduce supply. These pressures would limit the effect of any overall decline.

The article says forecasts point to the worst El Niño weather effect since 1950. Food prices are expected to rise just over 10% in 2026 and more than 7% in 2027, nearly 18% cumulatively. Metals and precious metals could also stay firm because of investment demand and geopolitical uncertainty.

Metals are essential inputs for building and powering modern infrastructure. Renewable-energy systems, electric vehicles, and data centers all require large amounts of metal for structures, electrical connections, batteries, cooling systems, and equipment. As investment in these areas grows, demand for suitable metals increases.

The World Bank highlights aluminum, copper, and tin as examples. It projects that metals prices will rise 25% and reach a new high in 2026. The report links this increase to two forces acting together: supply disruptions that limit availability and strong demand from investment in newer energy and technology systems.

The article does not give separate demand figures for each metal, so it does not rank their individual uses. It does show that all three are expected to set new records. If investment remains strong while supply disruptions continue, metals could remain an important source of commodity-price pressure in 2026.

A supply shock is a sudden event that changes the amount of a commodity producers can deliver. Wars, damaged infrastructure, blocked shipping routes, poor weather, or depleted inventories can all reduce supply. The shock matters because markets may need time to replace lost production or find alternative routes.

The basic mechanism is scarcity. If buyers still need oil, grain, or metal but sellers have less available, buyers compete for the remaining supply. That competition raises prices. The article gives several examples: Middle East fighting disrupts cargo shipping, Black Sea hostilities interfere with grain shipments, and depleted oil stocks leave markets less protected.

The World Bank says global oil supply could fall 5.2% in 2026, the biggest drop in four decades outside the 2020 recession. That helps explain why Brent oil is expected to average $92 per barrel. Multiple simultaneous shocks make the global economy more vulnerable to further disruptions.