Force Majeure Spreads Across Global Commodities as Iran War Disrupts Supply Chains

2026-03-09 11:25:00 ET

Force majeure declarations are beginning to ripple across the global commodities sector as the escalating conflict in the Middle East threatens to spread shocks beyond oil and gas.

Energy companies, producers and traders are already grappling with interruptions to shipments through the Strait of Hormuz, the narrow waterway linking the Persian Gulf to global markets.

The strait typically carries roughly one-fifth of the world’s oil and liquefied natural gas (LNG) supply, making it one of the most important chokepoints in global commodities trade.

?Energy producers declare force majeure

Some of the first force majeure declarations have emerged from the energy sector.

QatarEnergy declared force majeure on LNG deliveries last week after attacks forced the state-owned company to halt production at key facilities. The company continues to face security threats in the region.

In Israel, Chevron (NYSE:CVX) also declared force majeure at the Leviathan offshore gas field after authorities ordered a shutdown following US-Israeli strikes on Iran and subsequent retaliation across the region.

Leviathan is Israel’s largest gas field and supplies natural gas to Israel, Egypt and Jordan. The suspension marks the second time in less than a year that regional hostilities have interrupted operations at the site.

Meanwhile, oil producers in the Gulf have begun cutting output as tankers struggle to move through Hormuz. The United Arab Emirates and Kuwait have both started reducing production after storage facilities began filling up when exports could not leave the region.

?Aluminum, precious metals markets feel the shock

Aluminium Bahrain (LSE:78QZ) has invoked force majeure on some shipments after traffic through Hormuz effectively stalled. It said the measure was tied to transit disruptions rather than damage to its smelter operations.

The announcement sent aluminum prices sharply higher. Futures in London surged to their highest level since 2022, rising as much as 5.1 percent during trading before settling higher on the day.

The aluminum market is particularly sensitive to supply disruptions because the metal is used across a wide range of industries, including automotive manufacturing, construction, appliances and packaging. Even short interruptions can create shortages for manufacturers that rely on tightly timed deliveries of specialized metal products.

Mining financier Robert Friedland, founder of Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) , warned that the broader consequences of a prolonged closure of the Strait of Hormuz could extend far beyond the Gulf region.

“Further to what we said about the impact that the closing of the Strait of Hormuz has on the sulphur market… and therefore African copper production… Craig Tindale maps out that this is only one small piece of a giant and critically important 3D jigsaw,” Friedland wrote on X on March 5.

“Everything affects everything, everywhere, all of the time.”

Precious metals markets are also feeling the effects of the conflict. Air traffic across much of the Gulf region has been curtailed since US and Israeli strikes on Iran began, halting most flights in and out of Dubai.

Dubai, one of the world’s most important hubs for bullion logistics, handled roughly 20 percent of global gold shipments last year, serving as a key transit point for metal moving from Africa and Europe to Asian markets.

With flights grounded, traders say shipments of gold and silver have stalled across several trading centers.

“Gold availability has become a concern following the suspension of flights from the Middle East,” John Reade, senior market strategist at the World Gold Council, told the Financial Times .

Geopolitical turmoil drives metals market swings

Precious metals have already seen volatility this year, and war in the Middle East is already causing more.

Jeffrey Christian, managing partner at CPM Group, told the Investing News Network that geopolitical instability has been a major driver of investor demand for gold and silver.

“We look at the world right now and we see a world where the risks and uncertainties are greater now than at any time since Pearl Harbor in 1941,” he said in an interview on March 2.

“That has caused investors to buy more gold and silver than ever before.”

Christian added that high prices and volatility can also create bottlenecks in the physical metals market.

“You have to understand that with the high prices and the high volatility, that really puts a constraint … on the flow of physical metal through the market,” he said.

For now, the biggest question facing commodities markets is how long disruptions in the Persian Gulf will last.

The Strait of Hormuz remains effectively closed to most commercial shipping, leaving hundreds of oil and gas tankers anchored outside the passage while governments consider military escorts to reopen the route.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.