Global commodity prices are forecast to hit their lowest level in six years by 2026 as a growing oil glut, slower economic growth, and uncertain policy environments weigh on markets. The World Bank’s latest Commodity Markets Outlook warns that while easing energy and food costs are helping cool inflation, the relief may be short-lived.
Energy Prices Lead Global Decline
Energy remains the main driver behind the global commodity downturn. According to the World Bank, Brent crude oil prices are projected to fall from an average of $68 per barrel in 2025 to $60 in 2026, marking a five-year low. The expansion of the oil glut—now 65% larger than its 2020 peak—reflects weak demand growth and an accelerated shift toward electric and hybrid vehicles.
“Commodity markets are helping stabilize the global economy,” said Indermit Gill, the World Bank’s Chief Economist.
“But this respite will not last. Governments should use it to strengthen fiscal positions and attract investment.”
Falling oil prices are expected to reduce consumer inflation further through 2026. Yet, analysts caution that persistent oversupply could suppress energy sector profits and investment, limiting recovery in the medium term.
Food Prices and Agricultural Pressures
Lower energy costs have eased production expenses, contributing to modest declines in global food prices. Wheat and rice are becoming more affordable, while soybean prices are dropping due to record harvests and easing trade restrictions. However, fertilizer costs are projected to rise 21% in 2025 before easing slightly the following year—potentially squeezing farmer margins.
Global Commodity Forecast 2025–2026
| Commodity Category | 2025 Trend | 2026 Projection | Main Drivers |
|---|---|---|---|
| Oil (Brent) | ↓ 12% | ↓ 10% | Surplus supply, slower EV-adjusted demand |
| Food (overall) | ↓ 6.1% | ↓ 0.3% | Lower wheat, rice prices |
| Fertilizers | ↑ 21% | ↓ 5% | Trade limits, high input costs |
| Precious Metals | ↑ 30–40% | ↑ 5–8% | Safe-haven demand, central bank purchases |
Gold and Silver Defy the Trend
While most commodities are in decline, precious metals are soaring. Gold prices surged by 42% in 2025 and could approach $4,000 per ounce by mid-2026, nearly double their pre-pandemic average. Silver and platinum are also strengthening as investors seek safety amid market uncertainty and central banks expand their reserves.
These gains contrast sharply with falling energy and agricultural prices, reflecting investor anxiety over geopolitical risks, trade tensions, and monetary shifts.
Economic Implications for 2026–2027
Economists view the price downturn as both a challenge and an opportunity. On one hand, the easing of energy and food prices should help temper global inflation, allowing central banks to relax monetary policy. On the other, weaker demand signals slower growth, particularly for resource-dependent economies.
The World Bank expects global commodity prices to fall 7% in both 2025 and 2026, the fourth consecutive year of decline. Even so, prices remain above pre-pandemic levels—23% higher in 2025 and 14% higher in 2026 than in 2019. This suggests inflationary effects have not fully subsided despite the overall downward trend.
Economist Ayhan Kose, Deputy Chief Economist at the World Bank, urged governments to seize this period of lower oil prices to pursue reforms:
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Phasing out costly fuel subsidies
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Redirecting funds toward infrastructure and human capital investments
These shifts, he said, would “rebuild fiscal space while supporting more durable job creation.”
Risks on the Horizon
While the forecast points to stability, several factors could trigger renewed volatility. Prolonged geopolitical tensions, new trade sanctions, or extreme weather linked to La Niña could disrupt global supply chains and drive prices higher. Likewise, surging electricity use from artificial intelligence data centers may lift long-term demand for energy and base metals such as copper and aluminum.
If OPEC+ increases output beyond expectations, oil prices could fall further, deepening the glut. Conversely, a sudden supply disruption or conflict escalation could reverse the decline, pushing prices well above baseline forecasts.
Overview
By late 2026, most analysts expect commodity prices to stabilize, paving the way for a modest rebound in 2027. Energy markets may remain oversupplied, but gradual demand recovery and geopolitical normalization could start a new price cycle. For now, the 2026 forecast underscores a global economy balancing short-term inflation relief against longer-term uncertainty and structural change.
Sources: The World Bank, Oxford Economics, Voronoi, and Seeking Alpha.
Prepared by Ivan Alexander Golden, Founder of THX News™, an independent news organization delivering timely insights from global official sources. Combines AI-analyzed research with human-edited accuracy and context.
