Energy markets are experiencing another significant supply shock, with crude oil prices surging following the closure of Saudi Arabia's East-West pipeline and continued disruption surrounding the Strait of Hormuz. At the same time, higher interest-rate expectations and a stronger US Dollar are placing pressure on precious and industrial metals.
Brent crude surged 14.23% to $108.12 per barrel, taking its year-to-date gain to 77.68%. WTI rose 14.21% to $103.04 per barrel and is now up 79.47% for the year.
The immediate catalyst was Saudi Arabia's closure of the East-West pipeline, an important alternative route to the Strait of Hormuz during the ongoing US-Iran conflict. A planned meeting between Iran and Gulf nations aimed at establishing a temporary shipping lane through Hormuz was also postponed, reducing expectations for near-term supply relief.
Additional disruption is coming from Ukrainian attacks on Russian oil refineries, which have pushed diesel prices to record levels. The ICE gasoil crack spread reached its highest level since at least 2011, while the US administration is reportedly considering fuel export controls as domestic energy costs rise.
The impact is also visible in equities, with the Stoxx 600 Energy index up 37% year-to-date.
Natural gas markets remain sharply divided geographically. US Henry Hub declined 5.66% to $2.71/MMBtu as domestic supply remains abundant. Asian LNG prices, by contrast, have reached approximately $29/MMBtu, their highest level since December 2022, as Qatari exports remain disrupted and uncertainty surrounding Hormuz continues.
Precious metals are under pressure ahead of the Federal Reserve's decision. Gold declined 1.28% to $4,293.28 per ounce, while silver fell 2.39% to $62.95.
The combination of a stronger Dollar and rising expectations for a Federal Reserve rate increase has created a difficult environment for non-yielding assets. Higher oil prices are adding to inflation concerns and reinforcing the hawkish repricing. Silver has experienced greater year-to-date weakness than gold, reflecting both its precious-metal characteristics and weaker industrial demand from China.
Institutional interest in gold nevertheless remains present. Amundi has reportedly increased its bullion exposure on expectations that gold could return to $5,000 per ounce by year-end, while Pictet and Robeco have also rebuilt positions.
Copper is also under pressure, falling as much as 1.6% intraday to $14,018.50 per metric ton before recovering toward the previous LME close. Higher interest-rate expectations and an increase in LME warehouse inventories have reduced some of the extreme physical tightness seen during August.
The medium-term supply backdrop remains more supportive. Global copper mine production declined 1.1% during the first half of 2026, while structural demand from data centers and grid infrastructure continues to underpin the longer-term market.
Agricultural commodities have moved modestly higher as the energy shock raises transportation and fertilizer costs. Corn gained 1.42%, wheat advanced 0.38%, and soybeans remained broadly unchanged. Iron ore declined to $95.75 per metric ton, consistent with continued weakness in Chinese steel and construction demand.
The commodity complex is consequently becoming increasingly divided: crude oil is experiencing a supply-shock-driven bull market, while precious and base metals face pressure from higher rates, a stronger Dollar, and weaker Chinese demand.
