Commodities briefing — 2026-07-14

Two forces collided in commodity markets today. Renewed US strikes on Iran — the fourth in a week — pushed Brent to roughly $87/bbl (+4.3%) and WTI to $80.55 (+3%) after Tehran declared the Strait of Hormuz closed "until further notice" and the US Navy reimposed its blockade of Iranian vessels. Then June CPI landed softer than expected at 3.5% headline and 2.6% core, compressing September rate-hike odds and sending gold up more than 2% to $4,088 — reversing Monday's near-3% collapse. The result is an unusual split: oil is pricing a supply war while gold is pricing a Fed reprieve. Chair Warsh's first Congressional testimony this afternoon is the swing factor for whether that reprieve holds.

TL;DR

• Brent ~$87/bbl (+4.3%), WTI ~$80.55 (+3%) — Iran declares Hormuz closed after fourth US strike in a week

• Gold rallies 2%+ to ~$4,088 after June CPI prints 3.5% headline / 2.6% core, both better than expected

• Copper $6.31/lb (~$13,910/MT, +1.25%) on Chilean production declines — water shortages, ore grades, labour disputes

• Natural gas $2.88/MMBtu (-0.60%) — Freeport LNG maintenance through August caps export demand

• Wheat 635¢/bushel (+0.05%) — Friday's USDA WASDE is the pivotal near-term catalyst

Energy Complex: Hormuz Crisis Re-Escalates

Crude Oil: War Premium Returns Sharply

Brent has surged to approximately $87/bbl (+4.3%) and WTI to ~$80.55 (+3%), reversing the ceasefire-driven decline that briefly brought oil toward $69-70 last week.

The sequence: the US carried out its fourth strike in a week against Iran on Sunday, in retaliation for an Iranian attack on a Cyprus-flagged container ship. CENTCOM confirmed strikes on Iranian military targets including Bushehr, Chah Bahar, Jask, Konarak, Abu Musa and Bandar Abbas. Tehran declared the Strait of Hormuz "closed until further notice" — a claim CENTCOM rejects. Iran retaliated against US allies, and Kuwait reported damage to an offshore drilling platform, the first direct strike on energy infrastructure in weeks. Trump stated "the deal with Iran is over" and reinstated the naval blockade of Iranian vessels.

Trump has also demanded payment equal to 20% of the value of all cargo shipped through the strait in exchange for keeping it open. At current prices that amounts to roughly $32 million per supertanker — against previous Iranian transit charges of up to $2 million.

Hormuz handles roughly 20% of global seaborne crude and refined products. The Omani shipping corridor remains operational per the Joint Maritime Information Center, but tanker captains are making individual risk assessments, and insurance premiums have spiked. Tanker traffic remains subdued, though some vessels may be transiting without transmitting satellite signals.

Against this, OPEC has cut its 2026 oil demand growth forecast to 800,000 b/d — a demand-side offset that has been largely drowned out by the supply shock. OPEC+ is proceeding with 188,000 b/d of production increases in August.

Brent's 52-week intraday high was $120.88 on 30 April 2026. Citi had been holding a $75 Brent base case for Q3, premised on a US-Iran deal and Hormuz reopening — that forecast now looks difficult to defend.

Natural Gas: Freeport Maintenance Caps Upside

Natural gas fell to $2.88/MMBtu (-0.60%), diverging sharply from crude and reflecting distinctly North American dynamics. Freeport LNG began a major maintenance turnaround on 10 July running through late August, cutting feedgas demand. US inventories sit 6.6% above the five-year seasonal average as of 3 July, with Lower 48 output at 110.2 bcfd.

The oil/gas disconnect illustrates the structural difference: North American gas is a localised market driven by domestic balance, while crude is globally integrated and geopolitically sensitive.

Uranium

Uranium holds at ~$85.75/lb (as of 10 July), trading in a narrow $84-87 band since April as long-term contracting dynamics dominate spot mechanics. Geopolitical volatility in power markets continues to support the structural nuclear case.

Note: thermal coal pricing is not verified in this edition and has been omitted rather than carried forward from a stale feed.

Base Metals

Copper: Chilean Supply Disruption

Copper rose to $6.31/lb (~$13,910/MT) on 14 July, up 1.25%, as Chilean production continued to decline on water shortages, lower ore grades, unplanned maintenance, the oxide-to-sulphide transition, and labour disputes. Chile accounts for roughly 50% of global copper exports, with the metal contributing more than 10% of national GDP. Chile's monthly economic activity index has recorded consecutive declines this year, largely reflecting weaker mining output.

Copper is caught between two forces: Fed rate-hike expectations cloud the industrial demand outlook, while genuine supply disruption supports price. Today's soft CPI print tilts that balance modestly positive.

Aluminium: Recovering from Four-Month Lows

Aluminium was at approximately $3,155/MT on 13 July (+0.30%), down 6.52% over the past month but recovering from four-month lows near $3,085. LME warehouse drawdowns pushed total aluminium stocks below 300,000 tonnes for the first time since 2022. Macquarie forecasts a global shortfall of roughly 930,000 tonnes this year.

Hormuz adds upside: Gulf producers account for around 9% of global aluminium output, and European smelter operating costs rise with energy prices.

Precious Metals: CPI Reprieve Interrupts the Selloff

Gold rallied more than 2% to approximately $4,088/oz after June CPI came in better than expected — headline at 3.5% year-over-year, core at 2.6%. August gold futures gained 2.4% to $4,100. Silver advanced to $58.10 and platinum to $1,609.82.

This reverses a violent Monday. Spot gold fell nearly 3% on 13 July — its steepest one-day drop in more than a month — briefly breaking below $4,000 to an intraday low of $3,983.23, as renewed hostilities drove oil higher and hardened rate-hike expectations.

That Monday move illustrated the mechanism that has governed gold since February: higher oil → higher inflation expectations → higher rate-hike odds → higher real yields and a stronger dollar → mechanical selling of non-yielding bullion. Conflict escalation has been bearish for gold, not bullish — the inflation channel overwhelming the safe-haven channel.

Today's CPI print is the first serious challenge to that mechanism. A softer-than-expected inflation reading compresses September hike odds even with oil at $87, which is precisely the condition needed to break the pattern.

Rate expectations are genuinely unsettled and sources disagree. CME FedWatch had roughly 70% odds of a September hike pre-CPI, up sharply from 57% a week earlier. Trading Economics put it nearer 51%. ANZ noted markets pricing 43% for the July 28-29 meeting. All of those readings predate today's print, which should push them lower. The Fed held at 3.50-3.75% on 16-17 June in a unanimous 12-0 vote, but the dot plot showed nine of eighteen participants projecting at least one hike before year-end — Warsh notably did not submit a dot.

Technically, gold holds below its 21-day SMA at $4,111. Support sits at $3,960; resistance at $4,063, then the 21-day SMA. Gold remains roughly 28% below its January record.

Official-sector demand continues to provide a floor: the PBoC added 14.93 tonnes in June — its 20th consecutive month of purchases and largest single-month addition since 2023. Goldman revised its year-end 2026 gold target down to $4,900 in June; JPMorgan's Q4 target is $4,500. Both remain well above spot.

Warsh's testimony this afternoon is now the decisive catalyst. A hawkish tone would reassert the oil-inflation-hike channel and put $4,000 back in play. Confirmation that the Fed will look through energy-driven inflation would open a path toward $4,200.

Agriculture: WASDE in Focus

Wheat rose to 635¢/bushel (+0.05%) on 14 July, up 7.77% over the past month and 18.14% year-on-year. The market is consolidating ahead of Friday's USDA WASDE report, the most significant near-term price driver.

The supply picture is bifurcated. The USDA reported lower-than-expected June 1 wheat stocks of 920 million bushels and a reduced acreage forecast of 42.740 million acres, with strong export demand including a private sale of 100,000 tonnes of US hard red spring wheat to Nigeria. Offsetting this, China's harvest rose to 138.95 million tonnes from 138.16 million, and robust Black Sea production supports expectations of ample global availability.

Hormuz adds a modest premium via Middle East import uncertainty and fertiliser supply risk.

Note: corn, sugar, cotton and coffee pricing could not be independently verified for this edition and has been omitted rather than carried forward from a stale feed. Coverage will resume once a verified source is wired in.

Geopolitical Risk Matrix

• US has conducted four strikes against Iran in one week (Bushehr, Chah Bahar, Jask, Konarak, Abu Musa, Bandar Abbas)

• Iran has declared Hormuz "closed until further notice"; CENTCOM rejects the claim

• US Navy blockade of Iranian vessels reinstated

• Trump demanding 20% of cargo value for Hormuz transit (~$32m per supertanker)

• Kuwait offshore drilling platform struck — first energy infrastructure attack in weeks

• Trump: "the deal with Iran is over"

• Technical talks continue via Qatari and Pakistani mediators despite hostilities

• Omani shipping corridor remains operational

The conflict fundamentals remain entirely unresolved. The brief ceasefire was tactical, not strategic.

The key variable for commodity markets is whether US naval operations can maintain de facto Hormuz openness despite Iranian declarations. If vessel traffic drops materially, oil retests $100+ quickly.

Outlook

Energy (bullish bias): Brent has swung $17 in days. Q3 range now $80-100 absent new developments, with upside determined by whether Hormuz traffic is actually disrupted at scale rather than merely declared closed. Citi's $75 Q3 target requires a diplomatic resolution that current events make hard to see. OPEC+'s 188,000 b/d August increase is immaterial against a supply-war premium.

Base metals (cautiously constructive): Copper supported by genuine Chilean disruption; aluminium by LME drawdowns and a forecast deficit. Both benefit at the margin from today's softer CPI.

Precious metals (uncertain — Warsh is the catalyst): The rate-hike channel has dominated gold since February, but soft CPI is the first real crack in it. Whether gold holds $4,088 or reverts toward $4,000 depends almost entirely on Warsh's tone this afternoon. Support $3,960; resistance $4,063 then $4,111.

Agriculture (neutral, WASDE-dependent): Friday's report could move wheat 3-5% in either direction given the tight-US-stocks vs abundant-Black-Sea split.

Key Data Points

FAQ

Q: Why did gold fall on conflict escalation but rally on soft CPI?

A: Since February, gold has traded on the inflation channel rather than the safe-haven channel. Higher oil from Hormuz disruption raises inflation expectations, which raise Fed rate-hike odds, which raise real yields and the dollar — and non-yielding bullion sells off mechanically. That's why gold fell nearly 3% on Monday even as US-Iran hostilities intensified. Today's CPI print at 3.5% headline and 2.6% core, both better than expected, breaks the chain at its first link: if inflation is cooling despite $87 oil, the Fed has room to look through energy-driven price pressure. Gold rallied 2%+ on exactly that logic. The pattern only flips durably if the Fed confirms it — which is why Warsh's testimony this afternoon matters more than the oil price.

Q: How serious is Iran's declaration that Hormuz is "closed until further notice"?

A: Serious as a signal, contested as a physical reality. CENTCOM maintains the strait is open to commercial shipping and the Joint Maritime Information Center says the Omani corridor remains operational. But tanker traffic is subdued, insurance premiums have spiked, and some vessels appear to be transiting with transponders off. The critical distinction is between declared closure and enforced closure: traffic may self-regulate downward through voluntary avoidance even while the strait stays technically open, producing a de facto disruption without a formal one. That gap is why Brent is at $87 rather than $120. Trump's demand for 20% of cargo value — roughly $32 million per supertanker, against Iran's previous charges of up to $2 million — adds a second, stranger cost layer that the market has not fully priced.

Q: With Brent at $87, what are the realistic scenarios from here?

A: Bull case ($100-120): Iran materially reduces Hormuz traffic through mining, tanker strikes, or insurance-market paralysis, forcing genuine supply disruption to Asian importers. Entirely plausible given the current tempo of hostilities. Base case ($80-95): US naval operations keep Hormuz functionally open; oil trades on an uncertainty premium without major physical disruption; OPEC+ pauses its production increases. Bear case ($70-80): rapid diplomatic resolution and full Hormuz reopening — the scenario priced last week at $69-70, and the one Citi's $75 Q3 base case requires. Current events make it look optimistic. Note the demand-side offset most commentary is ignoring: OPEC has cut its 2026 demand growth forecast to 800,000 b/d, which caps the upside if the supply shock proves temporary.