Commodity markets experienced a sharp upswing throughout the summer, with virtually no sector spared. Rising geopolitical tensions in the Middle East, the return of El Niño, adverse weather conditions, and growing demand linked to the energy transition have all contributed to simultaneous price increases across energy products, agricultural commodities, and industrial metals.
No commodity now appears immune to rising prices. Energy, metals, and agricultural products are all bearing the full brunt of geoeconomic disruptions and climate-related shocks.
For now, there is little indication of a trend reversal before year-end... at the very least.
Simon LACOUME, Sector economist at Coface
An energy crisis that feels familiar
After a relatively quiet start to the summer, renewed military exchanges involving the United States and Iran, coupled with Houthi attacks targeting Saudi Arabia, have once again raised concerns about global energy supply chains. With inventories remaining low, oil prices quickly resumed their upward momentum. Brent crude climbed back above the USD 100-per-barrel mark, reaching a level not seen since May 22. Refined petroleum products saw even stronger gains, with diesel prices rising by 30% and jet fuel by 35% compared with June. These increases were largely driven by disruptions to refining operations in the Black Sea region, the Gulf, and Russia. For now, Coface continues to forecast an average oil price of USD 85 per barrel in 2026. Nevertheless, the latest escalation in geopolitical tensions clearly increases upward price risks.
Natural gas markets are following a similar path. In Europe, prices have risen by 12%, reaching their highest levels since 2023. Low storage levels and stronger competition for liquefied natural gas (LNG) shipments have supported the increase. At the same time, summer heatwaves boosted cooling demand across both Europe and Asia, while low water levels significantly reduced hydroelectric and nuclear power generation capacity.
Climate conditions increase pressure on agricultural markets
Agricultural commodities are also participating in this broad rise in prices. The trend reflects lower global harvests for key crops, with wheat, corn and rice production down by an estimated 2% year-on-year. Repeated periods of extreme heat across Europe, combined with growing concerns about a stronger El Niño event by 2027, are adding further upward pressure.
Corn prices increased by 20% over the month, followed by wheat at 18% and sugar at 11%. Wheat prices are now 50% higher than a year ago, largely due to disappointing harvests in several major producing countries, including Argentina, the United States, and Australia. Western Europe is also facing mounting challenges as recurrent heatwaves affect agricultural output. In France, the latest estimates from the Ministry of Agriculture suggest that corn production could decline by as much as 50% this year.
Looking further ahead, the strengthening of El Niño represents a major risk for global agriculture. The phenomenon could negatively affect harvests across a wide range of crops, including rice, soybeans, palm oil, and sugar. Rising pressure on grain markets may also gradually spread throughout the food supply chain, particularly in livestock production.
Industrial metals continue their upward momentum
Copper remains the main driver of higher industrial metal prices. The metal recently reached a record level of more than USD 14,000 per tonne. As highlighted in a recent Coface report, short-term market pressures are being reinforced by strong structural trends. These include inventory rebuilding in China, the continued electrification of the global economy, investments in energy infrastructure, and the rapid expansion of data centres. As a result, the S&P Industrial Metals Index has gained more than 3% over the past month. The increase has been supported in particular by higher prices for zinc (+2%) and copper (+0.8%). Taken together, these developments provide additional evidence that the current bullish cycle in industrial metals could persist over the longer term.
