In a year marked by geopolitical upheaval, global commodity markets are on a knife’s edge. From the streets of Gaza to the waters near Taiwan, regional conflicts are doing more than capturing headlines — they’re reshaping the cost and flow of key resources like oil, wheat, and rare earth metals.
Geopolitical Flashpoints Create Market Shockwaves
When violence breaks out in strategically critical zones, it doesn’t just spark diplomatic tension — it triggers price spikes, supply chain disruptions, and investment rerouting.
In the case of Gaza and the broader Middle East, oil and gas markets remain especially sensitive. Although Gaza itself isn’t an energy producer, regional escalation often pulls in larger players — Iran, Israel, and Gulf States — with potential repercussions for the Strait of Hormuz. Around 20% of global oil and nearly 30% of LNG shipments pass through that chokepoint.
As tensions rise, Brent crude prices have responded quickly. In May 2025, a 72-hour naval blockade scare linked to Iran pushed Brent up by $8 per barrel in just four trading days.
Taiwan: The Tech and Rare Earth Epicenter
The Taiwan Strait represents a very different, yet equally critical, pressure point. Taiwan manufactures over 60% of the world’s semiconductors, including over 90% of advanced chips. Any disruption to its industrial base would send ripple effects across electronics, automotive, defense, and AI industries.
But beyond chips, Taiwan’s geographic tension with China also casts a long shadow over rare earth minerals. China currently supplies around 70% of global rare earths and processes even more. If a confrontation forced export restrictions or targeted blockades, it could cripple production of electric vehicles, magnets, and wind turbines.
In late April, rumors of Chinese naval drills off Taiwan’s coast spiked neodymium and dysprosium futures by 12% and 9%, respectively — purely on fear of supply chain dislocation.
Ukraine & Russia: The Grain and Gas Factor
Though now in its third year, the war in Ukraine still distorts grain and fertilizer markets. Ukraine and Russia together account for more than 25% of global wheat exports. Black Sea shipping corridor blockages have created recurring volatility in food prices.
Fertilizer feedstocks such as potash and ammonia, also largely exported by Belarus and Russia, saw price surges of over 40% year-on-year in early 2025, affecting planting costs in Latin America and South Asia.
Gas pipelines through Ukraine remain a risk. Although Europe has reduced dependence on Russian gas from 39% in 2021 to under 10% today, any further cutoff could still trigger LNG price spikes, particularly in winter.
Supply Chains Rerouted — But Not Immune
Many nations have responded with diversification: India is ramping up rare earth production, the U.S. passed its CHIPS Act to support domestic semiconductor output, and Brazil has become a top wheat exporter to Africa.
Still, these adjustments take time. Commodity markets continue to price in geopolitical risk premiums, sometimes months in advance.
Investor Implications: Watch the Maps, Not Just the Charts
Commodities aren’t just about supply and demand anymore — they’re about geography. A missile over the Red Sea can send oil prices higher; a cyberattack on Taiwan’s grid could spike cobalt.
For investors, this means:
- Diversifying commodity exposure across geography and type
- Monitoring risk maps as closely as price charts
- Watching for sharp reactions in futures markets to political headlines
Goldman Sachs recently noted: “We are in a new era of commodities where politics equals volatility.”
Final Word
From Gaza to Taiwan, the global commodity web is being pulled taut by localized conflicts with global consequences. The next disruption may not come from fundamentals, but from flashpoints — where war, power, and trade collide.
Understanding those intersections is no longer optional — it’s essential.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website.
