Global Commodity Prices to Reach Six-Year Low in 2026

Strategic Insights -

Global commodity prices are on track to hit a six-year low in 2026, with a decline of 7% expected for both 2025 and 2026, according to the World Bank's latest Commodity Markets Outlook. The projection is due to weakening global economic growth, trade turmoil, a crude oil glut, and continued policy uncertainty. If global growth remains sluggish, prices could plummet even lower. Indermit Gill, the World Bank Group's chief economist and senior vice president for development economics, notes that falling energy prices have contributed to the decline in global consumer-price inflation, but this respite will not last.

Key Takeaways:

  • Global commodity prices are projected to decline by 7% each year from 2025 to 2026, marking the fourth straight year of decline.
  • The World Bank forecast Brent crude prices to average $68 per barrel in 2025, declining $13 from last year, and $60 per barrel in 2026, a five-year low.
  • Strong demand for liquefied petroleum gas (LPG) and petrol is driving India's oil consumption growth this year, with India expected to account for a significant portion of global oil consumption growth, alongside China.
  • China and India together are expected to account for a quarter of global oil consumption growth in 2025 and two-fifths in 2026, according to the International Energy Agency (IEA).
  • The World Bank recommends that governments use the current respite to get their fiscal house in order, make economies business-ready, and accelerate trade and investment.
  • Falling energy prices have contributed to the decline in global consumer-price inflation, but this respite will not last.

Statistics:

  • Global commodity prices are expected to decline by 7% in 2025 and 2026.
  • Brent crude prices are forecast to average:

+ $68 per barrel in 2025

+ $60 per barrel in 2026

+ $65 per barrel in 2027

  • India's oil consumption growth is driven by strong demand for LPG and petrol.
  • China and India are expected to account for:

+ 25% of global oil consumption growth in 2025

+ 40% of global oil consumption growth in 2026

Sources:

  • World Bank, Commodity Markets Outlook. No date provided.
  • International Energy Agency (IEA). No date provided.