Energy shocks and Black Sea trade disruptions
Commodity prices will rise 23% in 2026 as the Russia-Ukraine war compounds a historic Middle East energy shock, according to the World Bank. Ayhan Kose, the World Bank deputy chief economist, said commodity markets face several major shocks at once. Higher energy costs and trade disruptions drive up prices across a broad range of commodities, which threatens inflation, food insecurity, and economic growth. Hostilities between Russia and Ukraine impede Black Sea grain and oilseed shipments and constrain Russia’s output of oil products, specifically diesel.
Ukrainian strikes on Russian refineries have removed Russia’s role as a primary alternative supplier of oil products when Gulf exports drop. This damage to refining and export capacity prompted fuel export restrictions, causing net diesel exports from Russia and the Middle East to fall by 60% year-over-year in September. While Brent crude averaged $91 a barrel in 2026, the premium for European diesel over Brent reached a record monthly average of $91 a barrel in September. Washington eased sanctions on Russian diesel, letting Russian cargoes return to Turkey and Brazil. Kazakhstan, Brazil, Nigeria, Oman, Venezuela, and the US added 2.2 million barrels per day in production, but this only offset 18% of the average gross losses in global supply during the second and third quarters of 2026. The Bank warns that if outages at Russian oil facilities continue at their recent frequency, global oil production could further undershoot projected consumption and cause diesel shortages.
| Commodity | 2026 Price Change | 2027 Price Projection |
|---|---|---|
| Energy | 32% increase | $79/b average |
| Food | 10% increase | 7% increase |
| Metals | 25% increase | Record high |
| Wheat | 13% q/q increase (3Q26) | N/A |
Wheat shortages and tight European gas
The Black Sea remains the deadliest shipping route in the world because of attacks on vessels and ports. These hostilities fed a food price shock where wheat prices jumped 13% in the third quarter of 2026 to a three-and-a-half-year high. This price is 40% above levels from the previous year. Ukraine’s wheat exports fell nearly 70 percent in August 2026 compared to a year earlier, and low water on the Danube constrained another important route after Poland and Romania refused to take on more grain. Wheat exports from Ukraine are projected to fall 11% for the 2026-27 season, while Russia’s exports should drop 8%. Global wheat exports are set to drop by 7%, as shipments fall across all nine leading exporters.
European gas prices will rise 58% this year to $19 per million Btu, and the EU phase-out of Russian imports starting in 2027 poses a risk to that forecast. Because the EU relies on Russian gas for about 11 percent of its supply, the failure to obtain replacement volumes would intensify competition for flexible LNG cargoes and raise prices in both Europe and Asia. Fertilizer prices will rise 14% this year after a urea shock in early 2026, though muriate of potash remains cheaper relative to food prices due to eased US sanctions on Belarus. European Union restrictions on Russian primary aluminum imports tightened, which could fragment global markets and increase price volatility. The World Bank Group has made $50 billion to $60 billion available to help countries cope with these higher prices.
