World Bank: Commodity Prices Likely to Return to Pre-COVID Levels
Brent crude is forecast to average $64 per barrel in 2025—$17 less than in 2024—and just $60 in 2026, as supply remains ample.
Quick overview
- The World Bank forecasts a decline in global commodity prices, returning to 2015-2019 averages over the next two years.
- A projected 12% drop in commodity prices in 2025 and a further 5% decline in 2026 is expected due to weakening global economic growth.
- Falling prices may alleviate short-term inflation risks but could negatively impact commodity-exporting developing countries like Argentina.
- Energy prices are anticipated to decrease significantly, with Brent crude expected to average $64 per barrel in 2025.
In its latest Commodity Markets Outlook, the World Bank forecasts that, when adjusted for inflation, global commodity prices will fall back to their 2015–2019 average over the next two years.
This marks the end of a price surge fueled by the post-COVID recovery and Russia’s invasion of Ukraine in 2022.
Commodity Projections and Outlook
The Bank projects a 12% drop in global commodity prices in 2025, followed by a further 5% decline in 2026, as global economic growth weakens amid escalating trade tensions. In real terms, this would bring prices to their lowest levels in a decade.
While falling prices may help ease short-term inflation risks driven by new U.S. tariffs and rising global trade barriers, the trend could hurt commodity-exporting developing countries—Argentina among them.
“Higher commodity prices have been a windfall for many developing economies—two-thirds of which rely on commodity exports,” said World Bank Chief Economist Indermit Gill. “But we are now seeing the highest price volatility in more than 50 years. The combination of low prices and high volatility spells trouble.”
Gill urged these countries to liberalize trade where possible, restore fiscal discipline, and foster a more business-friendly environment to attract private investment.
Energy Prices and Inflation
Energy price spikes contributed more than two percentage points to global inflation in 2022. However, their decline in 2023 and 2024 helped moderate inflation, according to the report. The World Bank expects energy prices to fall by 17% in 2025—hitting a five-year low—followed by another 6% drop in 2026.
Brent crude is forecast to average $64 per barrel in 2025—$17 less than in 2024—and just $60 in 2026, as supply remains ample and demand weakens. This drop is partly driven by the rapid adoption of electric vehicles in China, the world’s largest auto market. On Tuesday, Brent crude fell over 2%, trading at $63.30 per barrel.
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