Sign in Subscribe
Economic growth

Global Commodity Prices Projected to Fall to 6-Year Low in 2026

Strategic Insights

— 2 min read

Declines in global energy prices, driven by weak economic growth and a growing oil surplus, are expected to contribute to a 7% drop in commodity prices in both 2025 and 2026, according to the World Bank Group's latest Commodity Markets Outlook. While prices are forecast to remain above pre-pandemic levels, they are projected to be 23% and 14% higher in 2025 and 2026, respectively, than in 2019. The global oil glut is expected to rise next year to 65% above the most recent high, with oil demand growing more slowly due to the increasing demand for electric and hybrid vehicles. The report highlights the importance of governments getting their fiscal house in order, making economies business-ready, and accelerating trade and investment to mitigate the impact of price volatility.

Key Takeaways:

  • Commodity prices are projected to fall by 7% in both 2025 and 2026, driven by weak global economic growth and a growing oil surplus.
  • Energy prices are forecast to fall by 12% in 2025 and a further 10% in 2026, with Brent crude oil prices expected to hit a 5-year low of $60 in 2026.
  • Food prices are easing, with declines of 6.1% projected in 2025 and 0.3% in 2026, with soybean prices falling due to record production and trade tensions.
  • Precious metals, such as gold and silver, are expected to reach record highs in 2025, fueled by demand for safe-haven assets and continued central bank purchases.
  • The global oil glut is expected to rise next year to 65% above the most recent high, with oil demand growing more slowly due to the increasing demand for electric and hybrid vehicles.
  • Areas such as farmers' profit margins and crop yields could be eroded as fertilizer prices surge 21% in 2025 before easing 5% in 2026.
  • The report highlights the importance of governments getting their fiscal house in order, making economies business-ready, and accelerating trade and investment to mitigate the impact of price volatility.
  • The report also emphasizes the need for countries to foster more diverse and efficient production, invest in technology and innovation, improve data transparency, and promote market-based pricing to build long-term resilience to price volatility.

Statistics:

  • Commodity prices are projected to drop by 7% in both 2025 and 2026.
  • Energy prices are forecast to fall by 12% in 2025 and a further 10% in 2026.
  • Brent crude oil prices are expected to hit a 5-year low of $60 in 2026.
  • Food prices are easing, with declines of 6.1% projected in 2025 and 0.3% in 2026.
  • Precious metals, such as gold and silver, are expected to reach record highs in 2025.
  • The global oil glut is expected to rise next year to 65% above the most recent high.
  • Oil demand is growing more slowly due to the increasing demand for electric and hybrid vehicles.
  • Fertilizer prices are projected to surge 21% in 2025 before easing 5% in 2026.

Sources:

  • World Bank Group's Commodity Markets Outlook
  • Indermit Gill, World Bank Group's Chief Economist and Senior Vice President for Development Economics
  • Ayhan Kose, World Bank's Deputy Chief Economist and Director of the Prospects Group

Read more