DBT Bureau
Pune, 9 March 2026
Global commodity markets turned highly volatile as crude oil prices surged nearly 25% to their highest level since 2022 amid escalating conflict involving Iran, the United States, and Israel. Brent crude approached $119.50 per barrel, raising fears of prolonged disruptions through the Strait of Hormuz. The sharp rally in energy prices lifted agricultural commodities such as palm oil, soybean oil, wheat, and corn due to biofuel demand links. Meanwhile, aluminium prices climbed on supply disruptions in the Gulf, while gold declined more than 2% as a stronger US dollar and rising inflation concerns reduced the appeal of precious metals.
Key Highlights
- Brent crude surges nearly 25% to around $119.50 per barrel.
- Edible oils and grains rally on strong biofuel demand outlook.
- Aluminium hits four-year high on Middle East supply risks.
- Gold drops over 2% as stronger dollar pressures bullion.
- Gulf producers cut output amid Strait of Hormuz tensions.
Global commodity markets experienced sharp volatility as oil prices surged dramatically amid escalating tensions in the Middle East. Benchmark Brent crude climbed to around $119.50 per barrel, marking its biggest one-day rise in percentage and absolute terms since mid-2022. The rally followed intensifying conflict involving Iran, the United States, and Israel, raising fears of significant disruptions to energy supplies passing through the strategically critical Strait of Hormuz.
Several Middle Eastern producers have already begun curtailing output as storage constraints and security risks escalate. Countries such as Iraq, Kuwait, and the UAE reportedly reduced production, while the situation remains fluid. Analysts note that the absence of a clear diplomatic resolution is fueling market anxiety and pushing risk premiums higher across energy markets.
The surge in crude oil prices quickly spilled over into agricultural markets. Vegetable oils, widely used in biofuel production, rallied strongly alongside energy prices. Malaysian palm oil jumped about 9%, while Chicago soybean oil climbed to its highest level since late 2022. Grain markets also reacted, with wheat touching its highest level since June 2024 and corn reaching a ten-month high.
Base metals presented a mixed picture. Aluminium prices rallied sharply, hitting a four-year high near $3,544 per tonne on the London Metal Exchange. Supply concerns intensified after major Gulf producers, including Qatalum and Aluminium Bahrain, declared force majeure on shipments due to regional tensions.
Meanwhile, gold moved in the opposite direction, falling more than 2%. A stronger US dollar and rising inflation concerns reduced bullion’s appeal despite heightened geopolitical uncertainty.
Finally, escalating Middle East tensions are reshaping commodity markets, driving oil and agriculture higher while strengthening the dollar and creating mixed movements across metals and precious commodities.
Source: Kedia Advisory
