Commodities Slide as US–Iran Deal Deflates War Premium; Oil and Precious Metals Lead Losses
A broad retreat swept across the commodities complex this week as a US–Iran agreement to reopen the Strait of Hormuz drained the war-risk premium that had inflated prices since the conflict began. Crude oil and precious metals led the decline into Thursday, while US natural gas stood out as the only gainer in the basket.
The move reflects a sharp repricing of geopolitical risk. With a deal to restore Gulf oil flows and Hormuz transit taking shape, traders have unwound the premium built up during the conflict, sending oil back toward multi-month lows and pulling haven metals down from their elevated early-year levels.
| Commodity | Last settlement (Wed 17 Jun) | Live (Thu 18 Jun) | Move vs settlement |
|---|---|---|---|
| Brent crude | US$79.55/bbl | US$78.63/bbl | −1.16% |
| WTI crude | US$76.79/bbl | US$75.45/bbl | −1.75% |
| Gold (COMEX) | US$4,381.40/oz | US$4,279.00/oz | −2.34% |
| Silver (COMEX) | US$70.77/oz | US$67.91/oz | −4.04% |
| Copper (COMEX) | US$6.4935/lb | US$6.4005/lb | −1.43% |
| Henry Hub gas | US$3.145/MMBtu | US$3.151/MMBtu | +0.19% |
Prices from CNBC. Last settlement refers to Wednesday 17 June; live rates refer to Thursday 18 June intraday levels (around midday in London) and are indicative, as commodity prices move continuously. Day moves are calculated against the last settlement.
Crude Oil
Brent crude last settled at US$79.55 a barrel on Wednesday and was trading around US$78.63 by midday in London on Thursday, down about 1.2% against settlement. US West Texas Intermediate (WTI) last settled at US$76.79 and was trading near US$75.45, down roughly 1.8%. Both benchmarks remain close to their lowest levels since early March and far below the wartime peak, when Brent reached around US$126 a barrel.
The driver is supply. The reopening of the Strait of Hormuz — the chokepoint through which a large share of the world’s seaborne oil passes — promises to restore disrupted Gulf exports. The International Energy Agency reinforced the bearish tone this week, forecasting that global oil supply will rebound strongly in 2027 and warning that the market is shifting from wartime shortage toward a sizeable surplus. For now, the prospect of returning barrels is outweighing residual risks that the normalisation of flows could be slow, uneven or politically fragile.
Gold
Gold, the classic haven, gave back ground as easing geopolitical tension reduced demand for protection. The COMEX active contract last settled at US$4,381.40 an ounce and was trading around US$4,279, down about 2.3% against settlement. The metal remains well below the record high it set in January 2026, underscoring that this is a pullback from elevated levels rather than a new milestone.
Two forces are weighing on gold at once: the fading war premium as the Hormuz deal takes hold, and a firmer US rate backdrop after the Federal Reserve’s hawkish hold — with its latest projections hinting at a possible 2026 hike, Treasury yields have risen, increasing the opportunity cost of holding a non-yielding asset.
Silver
Silver fell harder than gold, consistent with its higher volatility and industrial exposure. The COMEX active contract last settled at US$70.77 an ounce and was trading around US$67.91, down about 4% against settlement. Like gold, silver remains below its January 2026 peak, so the move is best described as a retreat from elevated levels, not a record in either direction.
Copper
Copper, a bellwether for global industrial demand, also slipped. The COMEX active contract last settled at US$6.49 a pound and was trading around US$6.40, down about 1.4% against settlement. The decline fits the broader risk-off tone in commodities, though copper’s losses were more contained than those in oil and precious metals, reflecting its sensitivity to the industrial cycle rather than the war premium alone.
Natural Gas
US natural gas bucked the trend. The Henry Hub front-month contract last settled at US$3.145 per million British thermal units and was trading around US$3.151, marginally higher and the only major commodity in positive territory. Henry Hub prices are driven primarily by domestic US supply-and-demand, storage, LNG export flows and weather dynamics rather than the Middle East risk premium, which helps explain its divergence from oil.
Why It Matters for the Gulf
For the Gulf, the commodity move cuts both ways. Lower oil prices weigh on the hydrocarbon revenues that underpin GCC budgets, reinforcing the case for fiscal discipline and diversification, particularly as the IEA points to a looming 2027 surplus. At the same time, the de-escalation that is pulling prices down is itself constructive: a reopened Hormuz restores the export routes on which regional producers depend, supporting volumes even as prices soften, and easing the broader uncertainty that had clouded the regional outlook.
Cheaper energy and softer commodity prices also help on the inflation side, relieving some of the imported-cost pressure that had been building across the region during the conflict.
Outlook
The near-term path for commodities hinges on how smoothly the Hormuz reopening proceeds. A swift, durable normalisation of Gulf flows would keep downward pressure on oil and limit any rebound in the war premium that supported gold and silver. Conversely, any setback in implementing the deal — given the infrastructure damage and logistical hurdles flagged by the IEA — could quickly restore some of the risk premium.
For gold specifically, the Federal Reserve’s policy path will remain a key second driver: a firmer rate outlook and higher yields would continue to cap the metal even as geopolitical risk recedes.
Sources: CNBC (Brent, WTI, gold, silver, copper and Henry Hub prices); International Energy Agency.
