Global Commodities: Wildcards 2H‘26:1970s Oil Shock Rerun, and Other Wildcards

Research evidence excerpt

Global Commodities: Wildcards 2H‘26:1970s Oil Shock Rerun, and Other Wildcards

rds #1 and #2.

Geopolitics and domestic politics have returned to being important drivers of

commodities markets since the 2010s, though the ways that geopolitics and

domestic politics influence markets have evolved. Conflicts and supply-side

disruptions and embargoes as key sources of disruptions have now expanded to

include sanctions, export controls, trade wars, strategic stockpiling and industrial

policy in driving prices. Governments are using alternative ways to intervene in

commodity markets, whether through sanctions on Russian exports, export

restrictions on critical minerals, strategic petroleum reserve releases, subsidies,

tariffs, or industrial policy designed to secure domestic supply chains. Since the

Arab Spring, many countries in the Middle East-North Africa region, but also across

North America and Europe, have experienced deeper political polarization around

issues ranging from income inequality to immigration. This political fragmentation

has contributed to volatile politics and policymaking, including a shift toward

economic nationalism. Critical minerals hoarding is discussed in Wildcard #3,

while the potential for the Russian Power of Siberia 2 gas pipeline to China and its

worsening of the potential 2030s LNG glut is discussed in Wildcard #8.

No discussion of modern commodity wildcards would be complete without

acknowledging the outsized role of the Trump administration. Across both the

2016-2020 administration and the current administration, US policy has

repeatedly generated commodities market surprises. The withdrawal from the

JCPOA and reimposition of sanctions on Iran, escalating tariffs against major