Commodities Surge on Hormuz Risks
Brent crude spiked 13% to $82/barrel — a 1-year high — while WTI hit $80 and natural gas jumped 4.31% to $2.98. Gold soared above $5,300/oz as safe-haven buying intensified, though silver dropped 5% to $89.625. BRICS nations, especially China and Russia, are stockpiling cheap oil and gold as the dollar weakens amid Strait of Hormuz closure fears.
The Strait of Hormuz is a critical chokepoint for global energy supplies, with about 21% of the world's daily petroleum liquids consumption passing through it. At its narrowest point, the strait is only 21 miles wide, with shipping lanes just two miles wide in each direction, making it a vulnerable passage for the supertankers that carry oil and gas from the Persian Gulf to international markets. This recent surge in commodity prices echoes historical precedents where geopolitical turmoil in the Middle East led to significant oil price shocks. The 1979 Iranian Revolution, for example, caused oil prices to more than double, leading to a global economic recession. Analysts are now warning that a prolonged closure of the Strait could push crude oil prices well into "triple digits." The current crisis escalated on February 28, 2026, following joint U.S.-Israeli military strikes on Iran, which included the assassination of Iran's Supreme Leader. In retaliation, Iran's Islamic Revolutionary Guard Corps (IRGC) began issuing warnings to vessels, effectively halting most shipping traffic and creating a de facto closure of the strait. BRICS nations have been expanding their economic influence in the Middle East, with Saudi Arabia, the UAE, Egypt, and Iran joining the bloc. China and India are major importers of oil from the region and are particularly vulnerable to supply disruptions. The stockpiling of cheap oil and gold by these nations can be seen as a move to de-dollarize and insulate their economies from Western-led financial systems amid escalating geopolitical tensions.
