Why Commodity Prices Are Set to Rise 16% in 2026
Twelve months ago, the consensus view of commodity markets was boring in the best way. Supply was ample, an oil glut was building, and the World Bank was projecting that overall commodity prices would sink to a six-year low in 2026. That world no longer exists.
The latest World Bank projections now point to overall commodity prices rising roughly 16% in 2026 — the first annual increase since 2022. The reversal is one of the sharpest regime changes in the post-pandemic era, and understanding why it happened is the foundation for reading every other market this year.
The energy shock did the heavy lifting
The single largest driver is the war in the Middle East and its effect on oil and gas. Energy prices are projected to surge around 24% this year, to their highest level since Russia's 2022 invasion of Ukraine. The mechanism is not primarily destroyed supply — it is risk. Shipping through the Strait of Hormuz, the channel for roughly a fifth of the world's oil, now carries a war-risk premium that expands and collapses with each headline.
That premium is violently unstable. In June the energy index fell 17.7% as tensions briefly cooled — Brent crude alone dropped 20.6% — before renewed US–Iran friction sent prices up almost 5% in a single week of early July. Volatility itself has become the story.
Metals: records with or without the war
The second engine is structural, not geopolitical. Copper, aluminum and tin face genuine supply constraints — depleted project pipelines, low inventories and surging demand from electrification and data centers. The World Bank sees the metals price index climbing about 17% in 2026 to a record high, with tightness persisting through 2027. Gold, silver and platinum all printed all-time highs in the first quarter as investors sought havens.
The counterweights
Not everything is rising. Agricultural prices are forecast to fall about 6% in 2026 as coffee and cocoa supply recovers, and iron ore is sliding toward pre-2019 levels as major new supply from Guinea's Simandou project reaches the market. These divergences matter: 2026 is not a broad supercycle but a split market, rewarding those who read each commodity on its own terms.
Primary sources: World Bank Commodity Markets Outlook, Deloitte 2026 Mining & Metals Outlook, McKinsey commodity trading research, and current exchange benchmark levels.