Geopolitical events impact commodity markets

What happened: Geopolitical tensions are disrupting global commodity markets. The ongoing Strait of Hormuz blockade has driven up oil prices and, consequently, gas prices in the U.S. (April 14). Meanwhile, the Russia-Ukraine war and U.S.-Iran conflict are rewiring global energy flows, potentially causing the worst energy shock on record (April 13). This has led to a resurgence of commodity currencies like the Norwegian Krone, Canadian Dollar, and Australian Dollar (April 17).

Market impact: Higher oil prices increase production costs for commodities like fertilizer, which could ripple through to agricultural stocks (April 14). Disruptions in energy flows may impact LNG stocks and global energy companies. Commodity currencies are expected to outperform larger rivals due to their exposure to commodity exports (April 17).

What to watch next: Investors should monitor U.S. gas prices for further increases due to the Hormuz blockade (April 14). The resolution of the Russia-Ukraine conflict and U.S.-Iran tensions will determine the extent of energy flow disruptions (April 13). Upcoming earnings from energy and agricultural companies will provide insights into the impact of higher input costs (various dates).