Oil Markets on Edge as Geopolitical Tensions and Trade Policies Reshape Commodities

Описание: LONDON, UK—(JLN)—July 2, 2025—The global commodities landscape is being fundamentally reshaped by escalating geopolitical tensions, trade policy shifts, and the ongoing green transition, according to Michael Haigh, managing director and global head of FIC and commodities research at Societe Generale. Speaking in an interview with John Lothian News at the FIA IDX conference in London, Haigh warned that recent events have injected unprecedented uncertainty into energy and metals markets.

“Last Friday was a game-changer—we had Israel bombing Iran in a way we've never seen before,” Haigh said, noting that while no energy supplies have yet been disrupted, oil prices have surged on a “hefty geopolitical risk premium.” Haigh emphasized that the greatest threat remains a potential closure of the Strait of Hormuz, through which 20% of the world’s oil flows. “If we get something like that even for a week... that would mechanically send oil prices above $100 a barrel,” he cautioned.
On the impact of the Russia-Ukraine conflict, Haigh suggested that a ceasefire could eventually ease Europe’s energy crisis, particularly if Russian gas flows resume via Ukraine. “That would be enough to fill up European gas storage, drop energy prices, and restore some of the manufacturing profitability,” he said. However, he noted the political sensitivities, especially regarding Europe’s reliance on U.S. LNG: “It would have to create a fine balance of bringing in a little bit of Russian gas but not so much that you don't need any U.S. LNG.”

Haigh also addressed distortions in commodity markets caused by tariff policies, highlighting speculation around a possible 25% U.S. tariff on copper imports. “The United States doesn't have enough copper production to fill what it normally imports... so you impose copper tariffs and you need it, that increases the price of copper,” he explained. Anticipation of tariffs has already shifted global copper flows, with “distortions in prices of copper in London and China relative to the U.S.”.
Haigh was critical of the recent use of the U.S. Strategic Petroleum Reserve to tame inflation: “The use of the SPR to calm down inflation during the Biden administration was an attempt to squash inflation as you run up to the election... it's being used for a different reason than actually what you would normally use it for, which is in the case of emergency.” However, he said that since the U.S. was a net exporter of crude, "theoretically it (USA) doesn't need an SPR anymore."

The green transition, Haigh argued, will continue to drive demand for metals, but supply constraints are inevitable. “The process is kind of bumpy... supply can't keep up with demand as we go forward in time, so that's the reality of the situation and you're going to need higher prices of metals to incentivize companies to mine more,” he said, warning of a mismatch between policy ambitions and physical market realities.

Haigh noted that both institutional and retail investors are increasingly active in commodities. “Commodities are very unique in that they have very distinct forward curves that are very seasonal... there’s a lot of products that are being built to exploit these changes in curve shapes,” he said, adding that retail flows into gold ETFs have risen in lockstep with global uncertainty: “If I plot a line of uncertainty... and you plot against that uncertainty level which flows into gold ETFs, it's almost one to one.”

As exchanges innovate with “green” commodity products and traceable metals, Haigh sees a shift in attitudes: “We need commodities to make the world a greener place; we can have commodities in our portfolio that aren't quite as dirty as what they were previously,” he said.
With volatility and uncertainty set to remain high, Haigh’s message to market participants was clear: “Commodity markets... are all very finely balanced. When you have a disruption... and you mix in on top of that regulation or trying to control the product flow that sometimes doesn't go right, then that's how we get these issues.”


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