Commodity Prices To Rise 23 Pct This Year, Further Supply Shocks Expected As Oil Stocks Depleted - World Bank
KUALA LUMPUR, Oct 28 (Bernama) -- Commodity prices are set to rise 23 per cent in 2026 as global shocks mount with the West Asia conflict having drawn down oil inventories and is set to push energy prices to a four-year high, according to the World Bank Group’s latest Commodity Markets Outlook released today.
The World Bank also said disrupted grain shipments and El Niño threaten harvests and food affordability.
“With oil stocks depleted, the world is more exposed to further supply shocks. As countries respond to these challenges, the World Bank Group is making financing and support available through its existing instruments, while scaling up its ability to mobilise private capital alongside its own resources,” said the World Bank in a statement issued in Washington.
World Bank deputy chief economist and director of the Prospects Group, Ayhan Kose said 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 World Bank said energy prices are projected to rise 32 per cent in 2026, reversing three years of declines, before moderating in 2027.
Brent is forecast to average at US$91 per barrel in 2026, up from US$69 in 2025, then ease to US$79 in 2027, it added.
The World Bank said global oil supply is projected to fall by 5.2 per cent in 2026, the largest drop in more than four decades outside the 2020 global recession.
Global oil consumption is anticipated to contract by 2.6 million barrels per day or 2.5 per cent in 2026, the third-largest decline on record, after the pandemic year of 2020 and the oil market turmoil of 1980.
“High prices amid supply shortages are curbing demand, while electrification is also reducing oil use, particularly in China. Even so, production remains below consumption, forcing further withdrawals from oil stocks and leaving markets more exposed to renewed disruption,” said the World Bank.
It added that conflict-related risks to oil markets were not limited to West Asia.
“Although Russia’s exports are assumed to be unconstrained next year in the baseline, damage to its infrastructure meaningfully reduced oil product exports in the third quarter of 2026,” the World Bank said.
-- BERNAMA