8 July 2026, 18:40 UTC

Middle East Conflict Pushes Commodity Prices to Highest Level in Over a Decade

Oil, gas and aluminum prices have jumped after the US-Israel-Iran conflict disrupted the Strait of Hormuz and Qatari LNG output, pushing the Bloomberg Commodity Index to its highest level since 2013. Rising breakeven inflation rates and World Bank warnings point to renewed price pressure for importers and manufacturers worldwide.

Oil, Gas and Metals Surge Together

Global commodity prices surged as the fallout from the US and Israeli war with Iran reverberated well beyond the Middle East, according to Semafor. The benchmark international oil price rose 4%, reaching its highest level in more than a year, as traffic through the Strait of Hormuz ground to a halt. Oil later bounced back and jumped 8% in a single day after reports emerged that Iran had launched the "Persian Gulf Strait Authority," Benzinga reported.

European gas prices skyrocketed around 70% within a week after Qatar said it would halt liquefied natural gas output, Semafor reported. India responded by slashing gas sales to industrial firms in anticipation of tighter supply. Metals markets were also hit: Bahrain, Saudi Arabia and the United Arab Emirates are key aluminum exporters, and the Middle East accounts for about 7% of global aluminum output, so the metal's price jumped as the conflict's fallout reached the Gulf.

Broad Index Hits Decade High

The Bloomberg Commodity Index climbed to 141 points, its highest level since February 2013 and above the peak reached during the 2022 energy crisis, according to an X post by the Kobeissi Letter cited by Benzinga. The index, which tracks 25 exchange-traded futures contracts across energy, metals and agriculture, has gained 28% year-to-date and is now on track for its first annual increase in four years, the Kobeissi Letter said.

Energy: roughly 39% of the index weighting
Agriculture: about 27%
Precious metals: about 16%
Industrial metals: about 13%

The World Bank Group projects energy prices will rise 24% this year, the steepest increase since the fallout from Russia's invasion of Ukraine, Benzinga reported, warning that the widening Middle East conflict carries broad implications for inflation, growth and financial markets.

Inflation Expectations Climb

The 5-year breakeven inflation rate recently reached 2.72%, its highest level since August 2022, while the 10-year breakeven rose to 2.50%, the highest since March 2023, according to Benzinga. "Inflation is back," the Kobeissi Letter said, tying the shift directly to the commodity rally.

Manufacturing and Supply Chain Watch

Other outlets flagged downstream risks to industry. Seeking Alpha reported that intense commodity price and supply pressures threaten global manufacturing performance, while Coface, cited by Reinsurance News, said commodity prices are rising as a direct result of the Middle East conflict. Saxo's monthly commodities note pointed to an energy-led surge and second-round effects even as some metals correct, and Mexico Business News reported that talks over the Strait of Hormuz have stalled as the Iran conflict continues, keeping a key oil and gas transit route at risk.

Expert commentary

“What's happening is simple: a physical chokepoint got threatened, and every market that depends on it repriced at once. Hormuz isn't just an oil story anymore — you've got Qatari LNG output stopping, European gas up 70% in a week, and India already rationing gas to its own factories. That's the tell. When importers start rationing before prices force them to, they're pricing in weeks of disruption, not days.

The losers here are energy-importing manufacturers, especially in Europe and Asia, who now face input costs on top of already-thin margins. The winners, at least on paper, are Gulf exporters who aren't directly in the line of fire — though even they're exposed if Hormuz traffic stays disrupted, since a lot of their own exports move through it. Aluminum is the sleeper risk: a 7% share of global supply sitting right in the blast radius means downstream buyers in autos and packaging should be hedging now, not waiting.

What I'd watch is whether this stays a shipping-lane problem or becomes a production problem. If Hormuz reopens in weeks, this is a spike that fades. If it drags into months, or if Qatar's LNG halt becomes semi-permanent, you're looking at the input-cost inflation the breakeven rates are already flagging, and that changes central bank calculus everywhere, not just in the region.”

Yusuf Demir

Trade Policy Analyst