World Bank Warns Commodity Prices Will Surge 23%
Global commodity prices are set to surge 23 per cent in 2026, the World Bank has warned, as rising energy costs and disruptions to cargo shipping during the Middle East war push up the cost of oil, food and metals. The bank published the forecast in its latest Commodity Markets Outlook, released on Wednesday.
The report says oil, natural gas, food and metals prices all rose sharply this year as global shocks mounted. It warns the situation could worsen if the conflict in the Middle East escalates further and damage to Russian oil infrastructure continues.
Energy leads the rise
Energy prices have surged 32 per cent in 2026, reaching their highest level since Russia invaded Ukraine in 2022. With oil output down, Brent crude prices are expected to remain high in the near term, averaging 92 dollars a barrel for the year.
Global oil supply is expected to fall 5.2 per cent in 2026, the biggest drop in four decades outside the 2020 global recession. Prices would be higher still, the bank adds, if oil demand were not forecast to fall 2.5 per cent this year.
Metals prices are projected to rise 25 per cent and hit a new high in 2026. Aluminium, copper and tin have all set new records, driven by supply disruptions and strong demand from renewable energy projects, electric vehicles and data centres.
Precious metals prices are projected to surge by 40 per cent in 2026, as investors seek safe-haven assets amid geopolitical and policy uncertainty. The bank expects some moderation in 2027.
Food prices and the El Nino threat
Food commodity prices are set to rise just over 10 per cent in 2026, the report says, because of grain shipment problems in the Black Sea caused by hostilities between Russia and Ukraine. A further rise of more than 7 per cent is expected in 2027, taking the cumulative increase to nearly 18 per cent.
Fertiliser prices are expected to rise 14 per cent in 2026, driven by a surge in urea prices, before returning to 2025 levels in 2027.
The bank also warns that continued shocks could keep food prices high. Its adverse scenario combines a record El Nino, more Black Sea grain disruption, escalation in the Middle East and ongoing damage to Russian oil infrastructure. In that case, food prices could run 12 per cent higher than expected.
That outcome, the bank notes, could trigger a food crisis like the one seen in the early 2010s, when more than 40 million additional people were pushed into extreme poverty.
“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.”
The bank says it has already provided 8.7 billion dollars in low-cost loans and other aid to 25 countries hit by the Middle East war. Overall, it expects commodity prices to ease by 7 per cent next year, but it warns that the global economy is more vulnerable to supply shocks now, because global oil stocks have been depleted during the war.
Commodity prices: what it means for Pakistan
For Pakistan, the forecast lands at an awkward moment. The country imports much of its energy and edible oil, so higher world prices feed straight into import bills, fuel costs and food inflation. Pakistan has already felt that pressure this year: an imported wheat cargo reached Karachi port in October, and the government has been acting to rein in rising wheat prices, as reported in Dar orders action on wheat prices.
Higher commodity prices also complicate the task of the State Bank of Pakistan, which raised its policy rate to 12 per cent on October 26. If food and fuel inflation stays high, the central bank will have less room to cut rates. The World Bank has separately tied a 600 million dollar loan to wheat and sugar reforms, and the International Monetary Fund has warned that the Iran war could shrink Pakistan’s economy in 2026. Against that backdrop, the commodity outlook is a direct warning about the cost of living for Pakistani households.
