World Bank Warns Commodity Shock Will Lift Prices 23% as War Hits Food and Fuel
The world economy is entering a commodity shock built from war, shipping disruption and climate stress—and the bill will land hardest on people who can least afford it.
The World Bank said Wednesday that its broad commodity-price index will jump 23 percent in 2026, reversing the decline it projected only months ago. Energy prices will rise 32 percent. Food commodities will climb about 10 percent this year and more than 7 percent in 2027. The institution’s new Commodity Markets Outlook turns a collection of regional crises into one global warning: fuel, fertilizer, grain and metals are now transmitting the costs of conflict into household budgets.
The central driver is the Middle East war. Oil inventories have fallen as production and shipping routes came under pressure. The Bank expects global oil supply to contract 5.2 percent this year—the steepest drop in more than four decades outside the 2020 recession. Brent crude will average about $91 a barrel in 2026, compared with $69 last year, before easing to $79 in 2027 under the baseline forecast.
That baseline is fragile. It assumes no major intensification of the conflicts disrupting commodity supplies. A wider Middle East war, continued attacks on Russian oil infrastructure, more Black Sea grain disruptions and an unusually strong El Niño could combine into something much worse. In the Bank’s adverse scenario, Brent averages $105 a barrel in 2027 and food prices run 12 percent above the baseline, surpassing their 2022 level.
“Commodity markets are being hit by several major shocks at once,” Ayhan Kose, the Bank’s deputy chief economist, said in the release. “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.” Reuters independently reported the same forecast and quotation.
Oil is only the first transmission belt. Fertilizer prices are forecast to rise 14 percent this year, increasing costs before farmers plant or harvest. Black Sea warfare is disrupting grain shipments. El Niño threatens yields. Higher diesel and shipping costs then travel through every stage between farm and market. The result is not an abstract index. It is a more expensive bag of rice, a smaller meal, or another family forced to choose between food and fuel.
The pressure also narrows the options available to governments. Central banks that hoped to lower interest rates may have to hold them higher if energy and food costs reignite inflation. Low-income states already carrying heavy debt face the opposite needs at once: protect consumers, finance imports and preserve public budgets. Richer governments can absorb part of the shock. Poorer ones often pass it directly to workers through prices, austerity or currency depreciation.
Metals reveal another contradiction. The Bank expects aluminum, copper and tin to hit record highs, pushing the metals index up 25 percent. Demand from renewable energy, electric vehicles and data centers is colliding with supply disruptions. The energy transition still requires mines, shipping lanes and grids; it cannot escape the political economy of extraction.
The Bank expects precious metals to surge 40 percent as investors seek safety. Gold gains when uncertainty rises, but hunger does not hedge. That divide exposes who benefits from crisis and who pays for it.
Commodity prices may fall 7 percent in 2027 if supply constraints ease. Yet the report’s real message is that the world has lost its cushion. Depleted oil stocks and interconnected markets mean a strike on a pipeline, a blocked grain route or a failed harvest can jump borders quickly.
Governments meeting this week cannot treat the forecast as weather. War policy, shipping security, food reserves, debt relief and social protection will determine whether the shock becomes another transfer from wages to commodity producers and financiers. The Bank has identified the danger. The political question is who will be protected first.
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