Commodities Overview: Trump Threats Escalate, WTI Surges Past $100, Aluminum and Gold Rise

Due to U.S. President Trump escalating his threat of military action against Iran, crude oil prices continued to rise on Monday, and WTI crude broke through $100 per barrel. Iran’s weekend attacks on aluminum plants in the Persian Gulf region intensified supply concerns, sending London aluminum prices sharply higher. Gold rose for the second consecutive day, supported by bargain-hunting purchases.

Crude Oil: U.S. oil settles above $100 as Trump escalates threat of strikes against Iran

U.S. crude oil prices settled on Monday above $100 per barrel, the first time since the outbreak of the Iran war. President Trump threatened to further escalate strike actions, including targeting key energy infrastructure in Tehran.

WTI futures rose more than 3%, settling at $102.88 per barrel, the highest level since July 2022.

As more U.S. troops arrive in the Middle East and Yemen’s Houthi forces supported by Iran join the conflict, oil prices received further support.

Traders warned that if the conflict cannot end soon, energy prices could see even larger increases.

Enverus Inc. oil and gas analyst Carl Larry said that when the WTI crude settlement price breaks above $100, it may indicate that oil traders are now focused only on the upside, regardless of whether any peace talks occur. “The market realizes upside risk is greater than downside risk, so the trading mindset is to plan for the worst first.”

Brent futures swung sharply in lower liquidity conditions, and traders are becoming increasingly inclined to wait and see. The May contract expires on Tuesday and settled at nearly $113 per barrel.

As of the close:

May WTI crude oil on the New York market rose 3.3%, settling at $102.88 per barrel.

May Brent crude oil rose 0.2%, settling at $112.78 per barrel.

June Brent crude oil rose 2.0%, settling at $107.39 per barrel.

**　Base Metals: Middle East supply risk intensifies LME aluminum prices surge**

On the impact of Iran’s weekend attacks on aluminum plants in the Persian Gulf, the London Metal Exchange (LME) aluminum price jumped sharply on Monday, rising as much as 6% at one point during the session.

Iran launched drone and missile attacks over the weekend on two major aluminum plants in the Persian Gulf, putting further pressure on an already tight global aluminum market. United Arab Emirates Global Aluminum said its Abu Dhabi facilities suffered “severe damage”; Bahrain Aluminum said it is assessing the extent of the damage.

The two targeted facilities combined have an annual production capacity of about 3.2 million metric tons. By comparison, in 2022, concerns that Russia’s aluminum supply might be disrupted had driven aluminum prices up by 30% within three weeks. Russia’s aluminum annual production is about 4 million metric tons.

The market is worried that disruptions to Gulf-region supply will magnify the tightness in the aluminum market. The Middle East accounts for 9% of global aluminum production, but with supply in other regions constrained and inventories continuing to decline, the current market has little buffer against additional shocks.

As of the close of the London market

LME copper futures rose 0.2% to $12,223.5 per metric ton.

LME aluminum futures rose 3.2% to $3,401 per metric ton.

LME nickel futures rose 0.5% to $17,263 per metric ton.

LME zinc futures rose 2.2% to $3,182 per metric ton.

LME tin futures rose 2.1% to $46,734 per metric ton.

LME lead futures rose 0.7% to $1,909 per metric ton.

Precious Metals: Gold prices rise

Gold prices rose for the second consecutive day on Monday. With the market waiting for clear signals on how long the Middle East conflict will last, dip-buying supported prices.

Gold prices at one point rose 1.9% to above $4,500 per ounce, then gave back some of the gains, highlighting resilience as oil prices rose.

Traders also began to resume bets on rate cuts, because U.S. Federal Reserve Chair Powell said long-term inflation expectations appear to be under control. This statement eased concerns that the rise in oil prices could lead to tightening monetary policy, while higher interest rates are unfavorable for gold prices.

At 4:25 p.m. New York time, spot gold rose 0.2% to $4,502.86 per ounce; silver rose 0.3% to $69.96; platinum and palladium also rose.

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