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The World Bank warned on Wednesday that global commodity prices are on course to climb 23% by the end of 2026, with energy prices at four-year highs because of the war in Iran and food prices pushed up by global conflicts and El Nino.
“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank’s deputy chief economist, in a statement accompanying the release of the organization’s Commodity Markets Outlook report.
“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,” he added.
Food prices were expected to rise by 10% in 2026 and another 7% next year, due to conflict-affected grain supply lines, the effects of an extreme El Nino phenomenon, and high fuel and fertilizer prices.
El Nino is a naturally occurring weather phenomenon that is set to bring higher temperatures to much of the planet this year, with its impact compounding the effects of man-made climate change.
For food producers, it is expected to lead to more flooding, droughts and heat stress across multiple regions.
Energy prices are projected to see an increase of 32% this year before moderating in 2027, the World Bank report said, assuming that conflicts in Iran and Ukraine do not intensify.
Global energy and fertilizer prices have skyrocketed since the United States and Israel launched a war against Iran in late February, plunging the Middle East into violence.
Iran responded with attacks on U.S. allies in the region and virtually choked the Strait of Hormuz, a key oil, natural gas and fertilizer supply route.
The World Bank report warned that an especially strong El Nino, intensifying attacks on Black Sea grain shipments during the Russia-Ukraine war, or further energy price spikes from the Iran war could lead to a “food crisis.”
“In an adverse scenario in which these risks materialize together, Brent could average $105 a barrel in 2027 and food commodity prices could be 12% higher than expected in the baseline forecast, surpassing their level in 2022,” the report said.
Brent is the international benchmark price for crude oil.
Since the start of the war on Iran, the World Bank has provided $8.7 billion in emergency support for vulnerable countries.
“The priority must be to protect the poorest people and support low-income countries already struggling with heavy debt burdens,” said Kose.
Global oil supply is slated to fall by 5.2% in 2026, the largest decline in more than four decades outside of the pandemic, due to the effects of wars in the Middle East and between Russia and Ukraine.
The report noted that global oil price forecasts would be higher still if oil consumption were not forecast to fall by 2.5% this year, the third-largest such drop after the Covid pandemic and the 1980 oil crisis.
Still, the forecasts for food, energy and overall commodity prices were sharply higher than the Bank’s earlier predictions in April.
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