Global commodity prices to surge 23 per cent in 2026 amid rising energy costs - World Bank

Global commodity prices to surge 23 per cent in 2026 amid rising energy costs - World Bank - Household goods in a cart at a supermarket. (Photo: Freepik)

Benchmark Brent crude oil is expected to average $91 (Sh11,822) per barrel in 2026, up from $69 (Sh8,964) in 2025, before easing to $79 (Sh10,263) in 2027.

Global commodity prices are projected to rise 23 per cent in 2026, driven by a sharp rebound in energy costs as conflict in the Middle East disrupts oil supplies and threatens to push food prices higher, according to the World Bank.

The bank’s latest Commodity Markets Outlook forecasts energy prices will jump 32 per cent this year, reversing three consecutive years of declines and exposing the global economy to renewed inflationary pressure.

Benchmark Brent crude oil is expected to average $91 (Sh11,822) per barrel in 2026, up from $69 (Sh8,964) in 2025, before easing to $79 (Sh10,263) in 2027.

The outlook comes as falling oil inventories leave the global market increasingly vulnerable to further shocks, with the US-Iran conflict contributing to reduced supplies and forcing countries to contend with higher energy costs.

“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.

“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 priority must be to protect the poorest people and support low-income countries already struggling with heavy debt burdens.”

Latest Stories

  • US seizes Sh97 million in crypto tied to Kenyan in Sh25 billion student aid fraud
  • Sifuna to launch Linda Mwananchi secretariat as 2027 presidential ambitions gather pace
  • Sudan army aide, former spy chief among eight jailed for life by UAE over illegal arms deals
  • African health ministers agree to keep borders open despite Ebola spread, focus on surveillance

The pressure is expected to extend beyond fuel markets, with food commodity prices forecast to increase 10 per cent this year and a further seven per cent in 2027.

This translates to a cumulative rise of about 18 per cent over the two years.

The lender attributes the projected increase to disrupted grain shipments, the threat of El Niño to harvests and higher fuel and fertiliser costs, which are raising agricultural production expenses and threatening food affordability.

Fertiliser prices are projected to rise 14 per cent in 2026, adding to the cost pressures facing farmers, while metals prices are expected to climb 25 per cent amid strong demand from renewable energy, electric vehicles and data centres.

The bank warns that the outlook could deteriorate further if conflict in the Middle East escalates or damage to Russia’s oil infrastructure persists.

Under an adverse scenario in which energy and food supply disruptions intensify alongside a strong El Niño, Brent crude could average $105 (Sh13,641) per barrel in 2027, while food commodity prices could rise 12 per cent above the baseline forecast, surpassing their 2022 levels.

Additionally, global oil supply is projected to contract 5.2 per cent in 2026, its largest decline in more than four decades outside the 2020 global recession.

Consumption is also expected to fall 2.5 per cent as elevated prices curb demand.