[MARKET ANALYSIS] Energy surges as the Iranian war enters a second week with no signs of abating

Crude - Oil opened in panic mode, with WTI and Brent initially surging above USD 100/bbl and rising 30% to briefly approach USD 120/bbl as the Iran conflict entered a second week and Gulf supply disruptions intensified (full Newsquawk analysis on the feed). Crude prices later pulled back after reports that the G7 will discuss a coordinated emergency reserve release, with some US officials said to favour a 300–400mln barrel draw (~25–30% of IEA system reserves), with the call set to take place at 12:30 GMT (08:30 EDT) amid the US clock change. Factors underpinning crude include: 1) Major regional producers, including Iraq, Kuwait, and the UAE, began cutting oil production by millions of barrels as storage facilities reached capacity. 2) The Strait of Hormuz, which handles 20% of global oil supply, remained "effectively shut," with tanker traffic dropping by 80–90%, and 3) Mojtaba Khamenei was named as the new Supreme Leader, signalling that Iran will maintain its confrontational stance against the US and Israel.
Natural Gas – European gas prices surged sharply by some 30% at the open amid Hormuz risk and Gulf infrastructure disruption. Severe tanker interference, soaring war-risk premiums and regional refinery attacks exacerbated volatility. While alternative routes (e.g., Red Sea) may cushion some flows, they cannot fully offset Hormuz volumes. Gas remains sensitive to any reopening signals or reserve coordination outcomes.
Precious Metals – Spot gold softened alongside a firmer USD and broader risk-off liquidation from energy-induced inflationary fears. Central bank demand remains supportive, with the PBoC reportedly extending gold purchases for a 16th consecutive month. Spot gold currently resides in a USD 5,015.04-5,171.95/oz range at the time of writing (vs Friday's 5,063.21-5,176.63/oz parameter).
Base Metals – Copper slumped at the reopen as oil’s surge and geopolitical risk dampened cyclical appetite. Prices recovered modestly off worst levels following firmer-than-expected Chinese inflation data, but the tone remains fragile. Persistent energy disruption and USD strength pose downside risks, while any easing in Gulf tensions could stabilise sentiment. 3M LME copper resides in a USD 12,594.00-12,845.00/t range at the time of writing.