World Bank Predicts Continued Decline in Global Commodity Prices

The World Bank forecasts a continued decrease in global commodity prices, with a notable 5% reduction expected in 2025, further dropping by 2% in 2026. A decline in oil prices supports this trend, whereas stable metal prices and increased natural gas costs temper the overall decline.

In a recent report, the World Bank Group has forecasted a gradual but significant decline in international commodity prices. Following a 3% dip this year, prices are anticipated to drop by 5% in 2025 and 2% in 2026, reaching their lowest point since 2020. A downturn in oil prices is expected to fuel this trend, while natural gas price hikes and stable forecasts for metals and agricultural commodities will soften the blow.

The report suggests that Brent crude prices are set to average $80 per barrel in 2024, before descending to $73 in 2025 and $72 in 2026. This anticipated drop is rooted in multiple factors, including weaker global oil demand—particularly from China—and an enhanced supply capacity within the OPEC+ alliance. Nonetheless, the World Bank warns that geopolitical tensions, particularly in the Middle East, could pose short-term risks that might drive prices higher temporarily.

The energy sector remains a focal point, with oil prices spiking above $90 per barrel in late 2023 and early 2024 amid regional conflicts, albeit temporarily as supply concerns abated. Conversely, metals markets are projected to maintain stability, with the metals price index expected to slightly decline in the coming years due to steady demand enduring from the global energy transition. Meanwhile, agriculture commodity prices are falling, driven by favorable weather conditions, with food prices set to ease further, boosting affordability in emerging markets.

(With inputs from agencies.)