Global commodity markets are heading toward a new phase of price pressures, with widening repercussions of the war in the Middle East on energy supplies and trade, and increasing risks to agricultural production due to shipping disruptions and climate changes. Forecasts from the World Bank, issued on October 28, reveal the expanding scope of the shock hitting markets, with primary commodity prices likely to rise by 23% in 2026.
In this context, this increase is driven by a 32% rise in energy prices, reflecting the repercussions of the conflict in the Middle East and the depletion of global oil reserves, according to the Bank's "Commodity Markets Outlook" report. The repercussions of these developments do not remain confined to oil and its derivatives markets but extend to food, fertilizers, and minerals, placing importing economies facing additional challenges related to rising production costs and inflation.
Energy.. The Starting Point of the Inflation Wave
The World Bank predicts the average price of Brent crude will rise to $91 per barrel during the current year, compared to $69 in 2025, before declining to $79 in 2027. This shift comes after three years of declining energy prices, while the Bank expects global oil supply to decrease by 5.2% in 2026, the largest drop in over four decades.
For its part, global oil consumption is expected to decline by 2.5%, marking the third largest annual contraction recorded after 2020 and 1980, due to the impact of rising prices on demand, alongside the expansion in electricity use. Estimates warn that the escalation of the conflict in the Middle East and continued damage to Russian oil infrastructure could push prices to levels higher than baseline expectations.
Food.. Repercussions Beyond Oil Prices
The effects of rising energy prices extend to the agricultural sector, with increased costs for fuel, fertilizers, and transport, coinciding with disruptions in grain shipments and the risks of the "El Nino" phenomenon. The World Bank expects food commodity prices to rise by about 10% in 2026, and an additional 7% in 2027, a cumulative increase of 18% over the two years.
Researcher and economic policy expert Inas Aboura, in an interview with SANA, pointed out that the world faces the possibility of a new inflationary wave, the danger of which is not limited to rising energy prices but lies in the transfer of this increase to the entire production and supply system. She noted that the potential impacts of these developments could be more severe in Syria, due to reliance on imports, limited local production, and the fragility of energy infrastructure.
Companies Prepare to Pass Costs to Consumers
The World Bank's forecasts coincide with growing indicators of pressures transferring from raw material markets to consumer goods prices, after global companies warned of the possibility of approving new price increases for their products next year. Reuters reported on Wednesday, October 28, that the British company Unilever stated that price increases in 2027 will be higher than the average increases recorded in 2026.
Aboura added that continuing to burden consumers with rising costs may lead to a decline in consumption, particularly among low and middle-income families, which will reflect on company sales, then on production, investment, and employment. These tensions place the global economy before a new test, amid continued energy and trade disruptions and rising production costs, as any potential declines in oil prices do not guarantee that the wave of price hikes will recede at the same pace.
Source: Syrian Arab News Agency (SANA)
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