AI Data Centers Fuel Record Copper Prices Amidst Ongoing Oil Price Surge
Copper has hit a record high, reaching $14,728 a metric ton on the London Metal Exchange, after already hitting $14,533 a ton a day earlier. This represents an 18% increase in value this year alone. While tariffs and supply concerns have contributed to the rise, a more significant factor is the growing demand for copper from AI data centers.
The International Copper Study Group found that global mine output fell by 1.1% in the first half of 2026, while refined production rose 2.4%, largely due to China and the Democratic Republic of Congo. This has left a small surplus of 131,000 tons, but demand is expected to outstrip supply by 2040 without meaningful expansion.
S&P Global estimates that copper demand from data centers will rise from 1.1 million metric tons in 2025 to 2.5 million metric tons by 2040. This is because data centers are becoming increasingly dependent on copper for their operations, with the metal used in server racks, substations, transformers, transmission lines, and local grid upgrades.
The price of oil has also increased due to Middle East tensions, reaching $97.92 a barrel for Brent crude and $93.03 for West Texas Intermediate. This is expected to put further pressure on data centers' power costs, as they rely heavily on diesel backup generators and other on-site power options.
Goldman Sachs has raised its forecasts for oil prices, predicting that Brent will reach $85 a barrel by December 2026 and WTI will hit $80. The bank also warns of a $120 Brent scenario if attacks in the Middle East intensify.