A new report from the World Bank reveals that global commodity prices are expected to drop to a five-year low in 2025, driven by an unprecedented oil glut. The oversupply is projected to exceed 1.2 million barrels per day, limiting price increases even in the event of a wider Middle East conflict.
According to the World Bank’s Commodity Markets Outlook, overall commodity prices will fall by nearly 10% from 2024 to 2026. Food prices are set to decline by 9% this year and 4% in 2025, while energy prices will drop by 6% in 2025 and 2% in 2026.
The oil glut is largely attributed to China’s slowing industrial production and increased adoption of electric vehicles. Non-OPEC countries are expected to ramp up oil production, and OPEC maintains significant spare capacity.
While falling commodity prices may ease inflation concerns, the World Bank warns that escalating conflicts could disrupt energy supply and drive up prices. “Falling commodity prices and better supply conditions can provide a buffer against geopolitical shocks,” said Indermit Gill, World Bank Group’s Chief Economist.
The report also notes that high food prices continue to affect developing countries, with over 725 million people facing food insecurity. Gold prices are expected to remain high, while industrial metals prices will remain steady.
Key projections include:
- Global commodity prices to drop by nearly 10% from 2024 to 2026
- Food prices to fall 9% in 2024 and 4% in 2025
- Energy prices to drop 6% in 2025 and 2% in 2026
- Brent crude price to fall to $73 in 2025, down from $80 in 2024
The World Bank’s report highlights the complexities of global commodity markets and the potential impacts of geopolitical tensions on price volatility.
Ruth Abla ADJORLOLO
