Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
World Bank Forecasts 23% Commodity Price Surge in 2026 as Middle East Conflict Intensifies
Highlights:
Global Commodity Prices Face Sharp Increase
The World Bank has projected a 23% increase in global commodity prices during 2026, driven by escalating Middle East tensions, supply disruptions and adverse weather conditions. Its latest Commodity Markets Outlook, released on 28 October 2026, highlights growing inflationary risks as energy shortages and agricultural challenges strain international markets.
The institution expects commodity prices to decline 7% in 2027, although renewed geopolitical instability could significantly alter this outlook.
Energy Prices Set for Sharp Rebound
Global energy costs are projected to climb 32% in 2026, marking a significant turnaround following three consecutive years of falling prices. Brent crude is expected to average US$91 per barrel, compared to US$69 in 2025, before moderating to US$79 in 2027.
Key projections include:
Depleted inventories could leave energy markets particularly vulnerable to additional supply disruptions.
Food and Metals Face Rising Risks
Food commodity prices are projected to increase approximately 10% in 2026 and another 7% in 2027, reflecting shipping disruptions, higher production costs and potential El Niño-related agricultural losses.
Meanwhile, industrial metals prices are expected to advance 25% in 2026, supported by renewable energy investment, electric vehicle manufacturing and expanding data-centre infrastructure. Precious metals could record an even stronger 40% increase as geopolitical uncertainty sustains safe-haven demand.
Outlook: Will Commodity Inflation Persist?
The World Bank anticipates some price moderation during 2027, provided geopolitical tensions do not intensify significantly.
However, a prolonged Middle East conflict, Russian energy infrastructure disruptions and worsening agricultural conditions could undermine this recovery. In a more challenging market environment, Brent crude prices could reach an annual average of US$105 per barrel in 2027. Persistently elevated commodity prices may complicate central bank inflation management, weaken household purchasing power and increase financial pressure on developing economies.
Note- All data presented is based on information available at the time of writing.
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