Commodity markets experienced widespread gains throughout the summer, with nearly every asset class moving higher. Rising geopolitical tensions in the Middle East, the resurgence of El Niño, increasing climate-related disruptions, and expanding demand tied to the energy transition have collectively pushed up prices for energy resources, agricultural commodities, and industrial metals.
No commodity now appears immune to rising prices. Energy, metals, and agricultural products are all bearing the full brunt of geoeconomic disruptions and climate-related shocks.
For now, there is little indication of a trend reversal before year-end... at the very least.
Simon LACOUME, Sector economist at Coface
An Energy Market Echoing Past Crises
After a relatively stable start to the summer, renewed military actions involving the United States and Iran, alongside Houthi attacks targeting Saudi Arabia, have once again raised concerns about global energy supplies. With inventories already limited, oil prices rapidly resumed their upward momentum. Brent crude has climbed back above USD 100 per barrel for the first time since May 22. Refined fuel markets have risen even more sharply, with diesel up 30% and jet fuel up 35% compared with June, largely due to disruptions affecting refining operations in the Black Sea region, the Gulf, and Russia. For the time being, Coface continues to project an average oil price of USD 85 per barrel in 2026. Nevertheless, recent developments have clearly increased the likelihood of stronger upward price pressures.
A similar trend can be seen in natural gas markets. European gas prices have climbed by 12%, reaching their highest point since 2023 amid low storage levels and more intense competition for liquefied natural gas (LNG) shipments. At the same time, prolonged heatwaves boosted cooling demand across both Europe and Asia, while low water levels reduced hydroelectric and nuclear power generation capacity in several regions.
Climate Risks Intensify Across Agricultural Markets
Agricultural commodities have also joined the broader rally, supported by declining global harvest volumes (-2% year-on-year) for key crops such as wheat, corn, and rice, recurring heatwaves across Europe, and increasingly concerning expectations for 2027 as El Niño continues to strengthen.
Over the past month, corn prices jumped by 20%, ahead of wheat (+18%) and sugar (+11%). Wheat is now trading 50% higher than a year ago, reflecting disappointing harvests in several major producing nations, including Argentina, the United States, and Australia. Conditions in Western Europe are also becoming increasingly challenging due to repeated periods of extreme heat. In France, the latest Ministry of Agriculture estimates suggest corn output could decline by as much as 50% this year.
Looking further ahead, the most significant threat remains a stronger El Niño phenomenon, which could affect global agriculture on multiple fronts. Crop yields could weaken across a range of markets, including rice, soybeans, palm oil, and sugar. Pressure in grain markets may also gradually spread throughout the wider food supply chain, particularly impacting livestock production.
Industrial Metals Remain on an Upward Path
Copper, which recently surpassed a record level of USD 14,000 per ton, continues to drive gains across industrial metal markets. As highlighted in a recent Coface analysis, the market is benefiting not only from near-term supply pressures but also from powerful long-term drivers, including inventory replenishment in China, the electrification of the global economy, expanding energy infrastructure investments, and continued growth in data center capacity. The S&P Industrial Metals Index increased by more than 3% over the past month, with support from zinc (+2%) and copper (+0.8%). This provides further evidence that the current bullish trend may have considerable staying power.
