Commodity Markets Overview Today: Energy Shock, Gold at $4,580, and a Copper Rally Driven by AI Demand

Global commodity markets are enduring a seismic repricing in 2026, shaped overwhelmingly by the ongoing war in the Middle East, a disrupted Strait of Hormuz, and the cascading supply shocks that have rippled from energy markets into metals, fertilizers, and agricultural inputs. As of May 30, the broad picture is one of elevated prices, acute volatility, and a fragile diplomacy that traders are pricing in — but not yet trusting.

According to the World Bank Group's April 2026 Commodity Markets Outlook, overall commodity prices are forecast to rise 16% this year — the first annual increase since 2022 — leaving them approximately 25% higher than anticipated at the start of the year. The driving force is unmistakable: a war in the Middle East that has delivered a severe shock across energy, fertilizer, and metals markets simultaneously.

**Energy: Brent Retreats From Record Peak, But Remains Elevated**

Crude oil has been the epicentre of the 2026 commodity storm. Brent crude surged from $72 a barrel at the end of February to a record $118 a barrel by the end of March — the largest monthly increase on record — as the Strait of Hormuz, a critical artery for roughly one-fifth of global oil and LNG flows, was effectively closed to commercial shipping. As of May 29, Brent was trading at $94.44 per barrel, a sharp monthly decline driven by tentative ceasefire diplomacy between Washington and Tehran.

Reports emerged late in the week that the US and Iran had reached a preliminary agreement to extend a ceasefire by 60 days and potentially permit unrestricted shipping through the Strait of Hormuz — a deal that, if approved by President Donald Trump, could clear mines from the waterway within 30 days. However, analysts warn that any recovery in flows would likely be slow, as mines would need clearing, damaged infrastructure repaired, and shut-in production restarted. WTI crude futures also fell below $88 per barrel on Friday. The World Bank projects Brent will average $86 a barrel across full-year 2026, assuming the most acute phase of Middle East supply disruptions ends within the second quarter.

**Natural Gas and Fertilizers: A Dangerous Transmission Chain**

The energy shock has transmitted with particular force into natural gas and fertilizer markets. Following a sharp drop in Middle East exports, competition to secure LNG intensified globally, with the Asian LNG benchmark surging 94% during March alone, and European natural gas prices rising 59% in the same period. European natural gas prices are now projected to surge approximately 25% across 2026, driven by LNG disruptions and damage to Qatari facilities.

The knock-on effect for fertilizers has been severe. The World Bank's energy price index rose 12.1% in April, and fertilizer prices jumped 14% in that month alone — a direct consequence of the structural dependency on natural gas as the primary feedstock for nitrogen production. The Middle East accounts for roughly 30% of globally traded ammonia and approximately 35% of globally traded urea, the world's most widely used nitrogen fertilizer. With Hormuz shipping frozen by the conflict, those exports have been severed. The fertilizer price index is projected to rise more than 30% in 2026, a level that, while severe, remains well below the spikes of 2021 and 2022.

**Gold: Safe-Haven Rally Meets Rate Headwinds**

Gold climbed for a second consecutive session on Friday, reaching $4,580 an ounce, after reports that the US and Iran may extend their ceasefire. However, prices remained on track for a 0.8% monthly decline, pressured by inflation concerns and expectations of prolonged higher interest rates. The Federal Reserve is widely expected to keep rates unchanged well into 2027, dampening the appeal of non-yielding bullion. US inflation data showed the fastest price rise in three years in April, reinforcing the hawkish outlook. Earlier in the year, gold, platinum, and silver reached record high levels during the first quarter of 2026 amid safe-haven and speculative demand surges. The World Bank's precious metals price index is projected to surge 42% in 2026, though a decline of 8% is anticipated in 2027 as conditions normalise.

**Copper: AI Infrastructure and Supply Constraints Keep Bulls Alive**

Copper futures traded near $6.4 per pound this week, underpinned by a distinctly structural demand narrative: the global buildout of artificial intelligence infrastructure, data centres, and electrification grids. Copper consumption in global power networks, spurred by the broader shift toward cleaner energy, continues to support the demand outlook. On the supply side, production constraints in top producer Chile — where major refiners have been forced to cut capacity due to shortages of sulfur used in smelting — have tightened availability. J.P. Morgan has noted that global visible copper inventory has risen to nearly 1.5 million tonnes this year, marking an increase of 540,000 metric tons, though stock levels outside the US reflect softening demand. Banks broadly project that copper in 2026 will face its biggest supply deficit in 22 years. For retail investors seeking access to commodity exposure — whether through ETFs or CFDs — platforms such as eToro, which operates under FCA, CySEC and ASIC regulation, are among the venues that provide access to these markets.

**Agriculture: The Relative Island of Calm**

Despite the broad-based commodity shock, agricultural prices have remained comparatively stable. The World Bank's agricultural commodity price index averaged approximately 7% lower in the first quarter of 2026 than a year earlier. Gains in grains and oilseeds were offset by sharp declines in beverage prices — particularly coffee and cocoa — as past supply crunches continued to unwind. The effects of the Middle East conflict on food commodity markets have, thus far, been more limited than the disruptions seen at the start of Russia's Ukraine invasion in 2022, when grain export shocks triggered an immediate food price surge.

**Outlook: Diplomacy Is the Key Variable**

The trajectory of global commodity markets through the remainder of 2026 hinges almost entirely on the pace and credibility of diplomatic resolution in the Middle East. A durable ceasefire, verified Strait of Hormuz reopening, and the gradual restart of Gulf energy infrastructure would provide meaningful relief to energy, fertilizer, and LNG markets. The World Bank projects commodity prices to ease in 2027 as supply conditions normalise and European natural gas prices fall approximately 20%. However, risks remain tilted to the upside: any escalation, prolonged shipping constraint, or further damage to Middle Eastern production facilities could sustain or extend the current elevated price environment well beyond year-end. For metals, the structural demand from energy transition and AI infrastructure spending provides a floor that is largely independent of geopolitics — a dynamic that is increasingly separating the performance of industrial metals from traditional macro cycles.