[MARKET ANALYSIS] Firmer crude prices amid geopolitical weekend escalation; metals also trade firmer

In geopolitics, the Houthis launched their first attacks on Israel since the war began, marking an expansion in the war, while strikes were reported across the region over the weekend. Trump said talks with Iran were progressing, though he also floated seizing Kharg Island, according to the FT; the WSJ said he is weighing an operation to extract Iran’s uranium, while CBS reported allies were told diplomacy would take time. The joining of the Houthis has prompted analysts to keep an eye on the Red Sea. The group, during the early days of the Hamas war, targeted shipping coming through the Bab al-Mandab strait at the southern end of the Red Sea, between Yemen and the Horn of Africa.
This is now more significant given the effective closure of the Strait of Hormuz in early March 2026 - Saudi Arabia has rapidly diverted its oil through the East-West Pipeline to the King Fahd Industrial Port in Yanbu. Towards Asia, tankers must travel south from Yanbu and pass through the Bab el-Mandeb to reach the Indian Ocean. To Europe & North America, these shipments typically travel north from Yanbu toward the Suez Canal or the Sumed Pipeline in Egypt. If the Bab el-Mandeb is blocked or deemed too high-risk, some Asia-bound tankers may choose to go north through the Suez Canal and then circumnavigate Africa via the Cape of Good Hope, though this adds high costs and time.
Brent rose towards USD 109.50/bbl before trimming gains and was trading around USD 108/bbl as the European day got underway (USD 106.33-109.46/bbl range), with the entry of Houthi militants and the arrival of more US troops heightening fears of wider energy-market disruption. SocGen sees a growing likelihood of Brent topping USD 150/bbl amid the Iran war, and added that Brent may average USD 125/bbl in April amid the Middle East situation. Analysts at ING suggest “Tight physical market conditions are also evident in the forward curve, with Brent’s prompt spread in deep backwardation. The front‑month contract traded at a premium of more than USD 7/bbl on Monday, compared with a largely flat structure before the conflict, underscoring acute near‑term supply concerns.”
Dutch TTF prices trade on a firmer footing above EUR 55/MWh but in largely choppy trade, underpinned by LNG availability concerns amid the Middle Eastern escalation. Meanwhile, an outage at a major Australian LNG facility due to storm damage further adds to supply woes.
Spot gold prices are firmer despite a resilient dollar, possibly with some haven appeal returning to the yellow metal and as no signs of an imminent wind down can be seen. Spot gold trades in a USD 4,420-4,550/oz range at the time of writing vs Friday’s USD 4,555/oz peak.
Elsewhere in metals, aluminium rose after Iran struck two production sites in the Middle East, with LME aluminium outpacing peers. Peers, however, are lifted in tandem despite the resilient USD and cautious sentiment across markets. 3M LME copper resides in a USD 12,019.00- 12,259.88/t range at the time of writing.