Geopolitical Shock Shakes Markets and Commodity Exchanges

March begins with a big bang. The main global news is also the key news for commodity markets and exchanges. It is therefore no surprise that most commodities opened trading in the green. As expected, energy commodities lead the way, and we will see to what extent other commodities will follow. Of course, everything will depend on the scale of the war and attacks on Iran, but one thing is certain – we are facing a period of significant price volatility, and it will take some time for the markets to accept the new normal, whatever that may be. The only question is the price we will have to pay for it.

This energy shock provides a strong bullish momentum and encourages the opening of long positions. Just a few days ago, the focus was on data from the U.S., Fed policy, and disruptions related to artificial intelligence, and now the spotlight is on Iran, crude oil, and the Strait of Hormuz. The euro/dollar exchange rate has meanwhile fallen to 1.18, in a context where the dollar is once again taking on the role of a safe haven, while energy supply in Europe is further threatened.

According to the World Bank report, the global economy in 2025 enjoyed relatively favorable conditions, driven by the expansion of international trade – at least until the introduction of new tariffs in the U.S. However, there are no signs that this positive trend will continue into 2026. As the cyclical factors supporting large economies weaken, the impact of new trade barriers will become increasingly pronounced.

The report emphasizes that bad news does not affect everyone equally. For example, Middle Eastern countries, such as Saudi Arabia, could achieve higher growth rates. However, the overall slowdown will burden global energy demand, with negative consequences for commodity markets and emerging economies dependent on resource exports. Essentially, the document concludes that the global economy has not stabilized on a sustainable path after the pandemic shock. Growth in 2025 was better than expected, but mainly due to temporary factors and cyclical inertia.

In 2026, a new reality emerges: trade barriers become structural, geopolitical fragmentation shows no signs of calming, and political uncertainty becomes a permanent state. The central strategic message of the report is clear – the economic environment is no longer neutral. Policy (tariffs), sanctions, and block divisions have become decisive factors for growth or stagnation. Globalization no longer functions as an automatic accelerator, and control replaces efficiency as a strategic priority. The world thus enters an era of fiercer competition and reduced security margins. In this context, any prolonged conflict – whether in Ukraine or now in Iran – becomes economically more expensive for all involved. The era of easy money and painless growth is over.

Energy Shock and the Return of Risk Premium

Brent crude oil futures prices surged at the beginning of the week – by more than eight percent, above $79 per barrel. At one point, the increase reached nearly 13 percent, the highest level since January 2025. The reason is the attacks by the U.S. and Israel on Iran, which have heightened fears of supply disruptions in the Middle East. Special attention is focused on the Strait of Hormuz, through which about one-fifth of global oil shipments and significant quantities of natural gas pass.

Tehran claims that the strait remains open, but shipping companies are already rerouting. Iran has responded with missile attacks on U.S. bases in the region, including the UAE, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq, and Syria. At the same time, OPEC+ has agreed to increase production by 206,000 barrels per day in April, ending a three-month pause, but significantly below the previously considered range of 411,000 to 548,000 barrels per day.

Iran produces about 3.3 million barrels of oil per day, or about three percent of global production. However, the key risk is not the direct loss of Iranian oil, but the potential blockade of the Strait of Hormuz. Oil prices have risen 19 percent since the beginning of the year, primarily due to fears of escalation in the Iran-U.S. conflict. In such circumstances, a level of $100 per barrel no longer seems unattainable.

China has increased natural gas production by about 50 percent over the past five years, despite already being the fourth-largest producer in the world. Most new projects relate to shale gas, particularly in the Sichuan Basin. Although China is unlikely to become a major gas exporter, the growth of domestic production strengthens its negotiating position with Russia and LNG exporters. The expansion of Chinese production reduces the need for imports and thus indirectly stabilizes the global market.

On agricultural markets, the focus is also on Iran, but also on weather conditions in Argentina, Chinese demand after the Lunar New Year, and the movement of the dollar. Funds closed short positions on wheat and corn last week while remaining strongly long on soybeans. Crop estimates in Ukraine indicate an increase in wheat and corn production in the new season.

Copper prices are around $13,200 per ton, with expectations of new Chinese stimulus at the “Two Sessions” meeting. Zimbabwe, on the other hand, has suspended the export of unprocessed lithium ores to encourage domestic processing, which has already raised lithium prices in Asian markets. This is part of a broader trend in which resource-exporting countries seek to retain greater added value within their own economies.