World Bank forecasts a 23% rise in commodity prices by the end of 2026

A sharp revision of forecasts

The World Bank warned on Wednesday that global commodity prices will rise by 23% by the end of 2026, with energy prices at a four-year high. The reasons cited are the war against Iran, global conflicts and the El Niño phenomenon. The forecasts for food, energy and overall commodity prices are markedly higher than the bank's April estimates (according to AFP).

Food and energy

According to the Commodity Markets Outlook report, food prices will rise by 10% in 2026 and by another 7% the following year — due to conflict-disrupted grain supply chains, an extreme El Niño, and high fuel and fertilizer prices. Energy prices are expected to climb by 32% this year, with growth slowing in 2027 — provided the conflicts in Iran and Ukraine do not intensify. The bank's deputy chief economist, Ayhan Kose, said that “commodity markets are being hit by several major shocks at once,” and that rising energy costs and trade disruptions “threaten to worsen inflation, food security and economic growth.”

The role of the war against Iran

Global prices for energy and fertilizers surged after the United States and Israel launched a war against Iran in late February. Iran responded by attacking US allies in the region and effectively closed the Strait of Hormuz — a key route for oil, gas and fertilizer supplies. Because of the wars in the Middle East and between Russia and Ukraine, global oil supply will shrink by 5.2% in 2026 — the largest drop in more than four decades outside the pandemic. The oil forecast would have been even higher had consumption not been expected to fall by 2.5% — the third-largest decline after the Covid pandemic and the 1980 oil crisis.

The risk of a 'food crisis' and support measures

The report warns that a particularly strong El Niño, intensified attacks on Black Sea grain shipments, or a new spike in energy prices could lead to a “food crisis.” In an adverse scenario where all these risks materialize simultaneously, Brent could average $105 per barrel in 2027, and food prices could exceed the baseline forecast by 12%, surpassing the 2022 level. Since the start of the war against Iran, the bank has already provided $8.7 billion in emergency support to vulnerable countries. “The priority must be to protect the poorest segments of the population and to support low-income countries already facing heavy debt burdens,” Kose said.