Global commodity markets are expected to remain under pressure through 2026 as conflict in the Middle East, supply-chain disruptions and shifting trade patterns keep energy and food prices elevated, raising fresh concerns about inflation and economic growth, according to a market assessment by Afreximbank.
Average crude oil prices are projected to rise to about $89 a barrel this year, a 9% increase from forecasts issued in April and 32% above 2025 levels, reflecting geopolitical risk premiums, supply concerns and uncertainty over production, the report said. Natural gas prices are expected to average $15, up 22% from last year. The higher costs threaten to prolong inflation and delay interest-rate cuts in major economies.
Although diplomatic efforts, temporary ceasefires and improving relations between Iran and the United States have eased some market pressures, commodity prices remain well above pre-conflict levels and vulnerable to further disruptions in production and shipping routes.
The outlook points to how geopolitical tensions are rippling across global markets, increasing costs for governments, businesses and consumers even as central banks attempt to tame inflation.
Higher energy prices are expected to trigger broader cost increases throughout the global economy, pushing up transportation, manufacturing and logistics expenses that are eventually passed on to households through more expensive goods and services.
“These higher costs are ultimately transmitted to consumers through elevated prices for goods and services, thereby prolonging inflationary pressures and potentially delaying the pace of monetary policy easing in many economies,” the report said.
Agricultural markets are also facing mounting strain. Fertilizer prices are forecast to surge by 26%, largely because fertilizer production relies heavily on natural gas. Rising input costs could force farmers, particularly in developing countries, to reduce fertilizer use, weakening crop yields and food production.
Global food prices are expected to increase by about 8% as higher transportation costs and supply-chain bottlenecks compound the impact of more expensive agricultural inputs.
The consequences are likely to be most severe for low-income and food-importing countries, where households spend a larger share of their income on essential goods. Rising food and energy costs could worsen inflation, widen trade deficits and place additional pressure on government budgets.
Meanwhile, investors seeking protection from geopolitical uncertainty have continued to pour money into precious metals. Gold prices, while below recent peaks, remain historically high as demand for safe-haven assets persists amid market volatility.
Silver and platinum have experienced sharper price swings, driven by changing industrial demand and uncertainty surrounding the global transition to clean energy technologies.
Cocoa prices, which soared to record levels earlier this year because of adverse weather and supply shortages in major producing countries, have retreated but remain volatile, highlighting the vulnerability of agricultural markets to climate shocks and structural imbalances in supply.
The report noted that the impact of higher commodity prices will vary significantly across countries depending on exchange-rate movements, tax policies, transport costs and dependence on imports. Energy-importing economies and countries reliant on commodity exports are expected to face the greatest risks to inflation, fiscal balances and economic growth.
Despite recent diplomatic progress, the outlook for global commodity markets remains clouded by uncertainty. Geopolitical tensions, climate-related disruptions and shifting patterns of global demand are expected to keep commodity prices above historical averages, reinforcing the need for governments to strengthen supply chains, diversify energy sources and bolster food security.
