Oil Prices Surge Amid Middle East Tensions, Copper Hits Record High
Oil prices have surged to near $100 per barrel as Middle East tensions escalate. The US launched military actions against Iranian oil tankers, and Iran fired ballistic missiles towards Jordan. This intensifies the assessment that negotiations with Iran are far off, leading to a risk premium in the market.
Despite heightened tensions, estimates for oil transit through the Strait of Hormuz have increased to 10 million barrels per day, roughly half of pre-conflict levels. Early production data from OPEC shows output dropped by 900,000 barrels per day in August, with Saudi Arabia's production declining by 1.12 million barrels per day.
Copper prices have reached a record high on the London Metal Exchange, driven by expectations of US tariffs on refined copper imports. The current proposal calls for a 15% levy starting in January 2027, increasing to 30% in 2028.