Analysis from ING points to growing geopolitical influences on key commodity markets, with copper and crude oil both seeing price dynamics shaped by trade and political risks rather than pure supply-and-demand fundamentals. In two separate assessments, the bank’s strategists highlight how tariff uncertainty and Middle East tensions are creating persistent risk premiums.
In the copper market, the prospect of US tariff adjustments is providing a floor under prices. According to ING, the ambiguity surrounding potential import duties—especially as the 2024 presidential election approaches—has introduced a tariff risk premium. Market participants are holding inventories and pricing in possible supply-chain disruptions, limiting downside even as Chinese demand fluctuates. The metal, critical for electrification and construction, now trades more on policy expectations than on classic industrial metrics.
Oil markets face a parallel dynamic, with Iran-related headlines triggering sharp swings. ING notes that any news around nuclear talks, sanctions enforcement, or military activity near the Strait of Hormuz immediately alters the supply-demand calculus. Iran accounts for roughly 2–3% of global output, and with inventories already tight, perceived threats to that supply can drive rapid rallies. The analysis suggests that until diplomatic clarity emerges, traders must navigate a volatile, headline-sensitive environment.
For investors and industrial consumers, the takeaway is that geopolitical risk management is now central to commodity exposure. Both metals and energy are reacting more to policy signals and security developments than to traditional economic data. ING’s reports underscore that these risk premiums are not yet fully priced in, leaving room for further price moves if tensions escalate or trade policies shift unexpectedly.
