Singapore: Global commodity markets have recorded sharp and contrasting movements since attacks between the US and Iran resumed six days ago, as disruption to shipping through the Strait of Hormuz intensified concerns over energy supplies, inflation, and global economic activity. Crude oil, natural gas, liquefied natural gas, and aviation fuel prices rose sharply as tanker traffic through one of the world's most important energy corridors slowed to a fraction of normal levels.
According to Anadolu Agency, the rally in energy prices also revived concerns that higher transportation and production costs could keep inflation elevated and delay interest-rate cuts by major central banks. Gold and silver, meanwhile, retreated despite heightened geopolitical risks as rising bond-yield expectations and a stronger inflation outlook reduced demand for non-yielding precious metals.
International oil benchmarks saw significant climbs, with Brent crude trading around $85.80 per barrel, up from its July 10 settlement of $76.01, marking an 11.6% increase since the renewed attacks. US benchmark West Texas Intermediate traded near $80.60 per barrel, representing an 11.5% increase over the six-day period. These gains were driven by concerns over the movement of crude oil and refined products from Gulf producers as tankers halted voyages amid Iranian attacks.
The Strait of Hormuz, a critical route for oil exports, has left global prices highly sensitive to any prolonged interruption. European gas prices surged more than 15% this week, with the Dutch Title Transfer Facility natural gas contract rising to about pound 56 ($64) per megawatt-hour. Asian LNG prices also registered an increase, with the Japan-Korea Marker climbing to $19.93 per million British thermal units.
International jet fuel prices averaged $127.06, a 6.7% increase from last week's average. The rise in prices reflected both the rally in crude oil and concerns over refined product availability. Gold and silver retreated, with spot gold trading around $3,990 per ounce and silver falling to about $55.40 per ounce. These declines were influenced by rising interest-rate expectations and concerns over energy costs impacting manufacturing activity.
Prices were recorded during Friday trading and remain subject to rapid changes as military developments, shipping conditions, and government measures affecting the Strait of Hormuz evolve.