Geopolitical conflict triggers a surge in commodities! The blockade of the Strait of Hormuz leads to a sharp rise in gold, silver, and crude oil prices.

Multiple international geopolitical risks have erupted simultaneously, causing intense turbulence in global financial markets. On the 16th local time, significant news emerged consecutively from the Middle East, Russia-Ukraine, and the US-South Korea regions. Stimulated by multiple crises such as the obstruction of passage through the Strait of Hormuz and ongoing clashes between Russia and Ukraine, international crude oil, gold, and silver all surged sharply at the opening, ushering in a strong upward trend in the energy and precious metals markets.

The conflict between the US and Iran has escalated completely, and passage through the strait is nearly at a standstill.

The situation in the Middle East is the core trigger of this round of surge in commodity prices. Iranian Armed Forces Commander-in-Chief Hatami made a strong public statement, officially prohibiting U.S. troops from entering the Persian Gulf, the Gulf of Oman, and the Strait of Hormuz, bluntly stating that the United States has been completely expelled and will never regain previous U.S. military passage rights. In response to Trump’s threat to declare the strait as U.S. territory, Iran directly dismissed it as nonsense and introduced a bounty policy, promising $30,000 to any citizen who captures or kills U.S. aggressors, further escalating the confrontation between Iran and the U.S.

The Strait of Hormuz is a key global oil transport route. Currently, the traffic through the strait has only recovered to 10%-15% of pre-conflict levels, which is far from the 45% recovery claimed by the U.S. Data shows that daily loading of Middle Eastern crude fell sharply from 20 million barrels at the beginning of July to 12 million barrels, with a daily production shortfall of 8.3 million barrels compared to pre-war levels. The supply shortage has shifted from a market risk premium to an actual logistics gap. As a result, Brent crude opened as high as $89 per barrel, spot silver touched $65.13 per ounce, and gold rose to $4383.44. All three major commodities opened higher, with slight pullbacks afterward.

Crude oil market experiences intensified long and short battles, short-term high-level fluctuations may face pressure in the fourth quarter

Futures analysts point out that the current crude oil market shows a pattern of ‘geopolitical factors setting the price floor, supply and demand supporting bottom prices.’ Right now, global crude oil and refined oil inventories are at five-year lows for this time of year, and U.S. gasoline and diesel retail prices have hit record highs for the same period. The low inventory environment makes it hard for oil prices to drop sharply; however, negative factors on the demand side are gradually emerging. OPEC and the IEA have both downgraded their 2026 global oil demand growth forecasts, the U.S. summer driving season is coming to an end, refinery operating rates are expected to fall in September and October, and weakening demand will limit oil price gains, while the supply gap in the fourth quarter is also expected to narrow significantly.

Inventory data also conceals risks. U.S. commercial crude oil inventories surged by 17.423 million barrels in a single week, marking the largest increase in three and a half years, while the Strategic Petroleum Reserve fell below 300 million barrels, significantly reducing buffer capacity. Agencies predict that in the short term, disagreements in the Strait of Hormuz negotiations are unlikely to be resolved, and the geopolitical premium is unlikely to dissipate quickly, keeping oil prices at high levels with fluctuations; by autumn, as demand diminishes, the market is highly likely to face downward pressure.

Currently, geopolitical risks are intertwined in many parts of the world, and the volatility of safe-haven assets and energy commodities will continue to increase. The progress of passage through the Strait of Hormuz and the course of US-Iran negotiations will become key observation indicators for the subsequent trends of major commodities.