NAIROBI, Kenya – Global commodity prices are projected to rise by 23 per cent in 2026, with energy costs expected to surge by 32 per cent as conflict-related supply disruptions, weather risks and shipping challenges put pressure on markets.
The World Bank Group’s October 2026 Commodity Markets Outlook, released on October 28, warns that the price increases could intensify inflation, raise food insecurity and weaken economic growth, particularly in countries already struggling with high debt and poverty.
The forecast signals fresh pressure for import-dependent economies such as Kenya, where higher international fuel and fertiliser costs can feed into transport, electricity, agricultural production and the prices households pay for basic goods.
Energy prices are expected to reach a four-year high in 2026, reversing three consecutive years of declines. However, the Bank projects overall commodity prices will fall by seven per cent in 2027 as some supply pressures ease.
Oil Supply Faces Historic Contraction
The Middle East conflict has drawn down global oil inventories, leaving markets increasingly exposed to further disruptions, the World Bank said.
Brent crude is forecast to average $91 per barrel in 2026, compared with $69 in 2025, before easing to $79 in 2027.
Global oil supply is expected to contract by 5.2 per cent this year, marking the largest decline in more than four decades outside the 2020 global recession.
Demand is also projected to fall by 2.5 per cent, representing the third-largest annual contraction on record after 2020 and 1980.
The Bank attributed the decline in consumption to high prices and growing electrification, particularly in China. Despite weaker demand, production is expected to remain below consumption, forcing further withdrawals from existing inventories.
That imbalance leaves the market vulnerable if additional disruptions affect major oil-producing or shipping regions.
“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group.
He warned that higher energy costs and trade disruptions were pushing up prices across multiple commodity markets, threatening inflation, food security and economic growth.
Kose said protecting vulnerable populations and supporting low-income countries facing heavy debt burdens should remain priorities.
Food and Fertiliser Costs Add to Pressure
Food commodity prices are projected to rise by about 10 per cent in 2026 and a further seven per cent in 2027, bringing the cumulative increase to approximately 18 per cent over the two years.
The World Bank identified disruptions to grain shipments, the threat of El Niño-related harvest losses and higher agricultural input costs as key risks.
Rising fuel and fertiliser prices could make food production more expensive, while interruptions to shipping routes could restrict supplies and push up prices in importing countries.
Fertiliser prices are forecast to increase by 14 per cent in 2026 following an early-year surge in urea prices. The Bank expects the index to return to 2025 levels in 2027.
For countries such as Kenya, the combination of higher fertiliser costs and more expensive fuel could place additional pressure on farmers and food supply chains, although the eventual effect on local prices will also depend on exchange rates, domestic production, taxes and distribution costs.
Metals and Gold Prices Head Higher
The World Bank expects metals and minerals prices to rise by approximately 25 per cent in 2026, reaching a new annual high.
Aluminium, copper and tin are projected to record unprecedented price levels, supported by demand from renewable energy investments, electric vehicles and data centres, alongside supply disruptions.
Precious metals prices are expected to increase by about 40 per cent this year as investors continue seeking safe-haven assets amid geopolitical tensions and uncertainty over economic policies.
The Bank expects some moderation in precious metals prices in 2027, although they are projected to remain substantially above their historical averages.
World Bank Warns of More Severe Price Shock
The Bank’s main forecast assumes there will be no major escalation of conflicts affecting global commodity supplies.
However, it warned that several risks could combine to produce a much worse outcome. These include further escalation of the Middle East conflict, continued damage to Russian oil infrastructure, attacks on Black Sea grain shipments and an unusually strong El Niño.
If those developments materialise together, Brent crude could average $105 per barrel in 2027, while food commodity prices could rise 12 per cent above the baseline forecast.
The Bank warned that such an increase could push food prices beyond levels recorded in 2022 and heighten the risk of a food crisis, particularly in countries with high poverty rates.
To help governments manage the effects of higher prices, the World Bank Group said it had made between $50 billion and $60 billion available through existing financing instruments, including $25 billion in pre-arranged financing.
The funding can support social protection programmes, strengthen government finances and provide working capital and liquidity to businesses and farms.
