Commodity Price Watch: April 2026

The Middle East war continued to squeeze global oil and natural gas markets into the first half of April as the number of vessels traveling through the Strait of Hormuz remains close to zero. Our forecast assumes at least a partial recovery in oil flows through the Strait of Hormuz by the end of April, with a gradual ramp-up over May. 

The major impacts from the Middle East war are on crude oil and refined products, natural gas, chemicals and plastics, and a few nonferrous metals. The Materials Price Index (MPI) by S&P Global Market Intelligence will peak in the second quarter about 25% higher than the pre-war forecast. As measured by the MPI, industrial materials prices increased more than 10% in the first quarter of 2026 and are forecast for another double-digit increase in the second quarter. The process to pass through higher manufacturing costs will be limited by weaker demand, however.

The impact of high gasoline and other affected consumer goods prices leads to higher inflation that squeezes household budgets. A major impact will be lower near-term spending on big purchases like cars, appliances and new homes, weighing on demand for industrial materials. The lower economic growth projections for major economies likewise imply a less upbeat outlook for businesses. At the time of writing, we are already about six weeks into the eight weeks this outlook assumes that trade through the Strait of Hormuz is near zero. The risk of a longer-lasting disruption, and thus tighter material supply and larger downward impact on demand, is significant and growing.

Global oil, refined product and natural gas prices have rocketed higher and will remain elevated compared with previous forecasts through the end of 2026. Even after traffic returns to normal levels through the Strait of Hormuz, the pivot to build up inventories, coupled with the damage to production and export infrastructure, will leave fundamental supply tighter for several months.

At the time of writing, there is a ceasefire. The results of the impending negotiations are unknown; however, the ceasefire does imply a level of willingness to negotiate by all parties. If a more lasting truce can be achieved in this round of negotiations, this would fall in line with our assumptions.

The scale of disruption, however, cannot be fixed overnight. Damage to processing facilities and the restart of shuttered production will take time, leaving lasting damage to supply, the worst of which should be resolved in about six months. The negotiations are by no means guaranteed to head toward a truce, though. The longer traffic does not pass the Strait of Hormuz, the higher prices will go.

The chemicals and resins forecast was revised significantly upward across the board with our latest forecast. Higher pricing from upstream energy markets is partly to blame, but the overall push higher is being led by the general disruption to global supply chains coming from the war in the Middle East. Price rises across petrochemicals in the first half of 2026 will be broad, mirroring crude oil and natural gas increases.

The North American polyethylene forecast was revised significantly upward in this update. Higher pricing from upstream ethylene is partly to blame, but the overall push higher is being led by the general disruption to global supply chains coming from the war in the Middle East. What the significant global disruptions have done is reinforce the US position as a critical supplier to buyers in Europe, Asia, Africa and Latin America. Risk to the forecast leaning toward the upside until more clarity is reached on the conflict in the Middle East.

The polyethylene forecasts for Europe and Asia also were revised significantly upward in this update. 

The impact of war has been more fully incorporated in April compared with March as more information can be considered. Prices were revised up for the US in the March Commodity Price Watch, and even more in April. US mills are pushing through price increases even though scrap is flat to down. Europe, however, has seen minimal revision since March as the trends are moving as expected.

Asia saw more of an initial jump than expected — about 5% — which is incorporated into the April Commodity Price Watch. However, little additional increases are sticking, so the March Commodity Price Watch profile of flat for 2026 rather than the pre-war uptrend is not changed.

Supply disruption is unlikely but may occur if war-related shipping issues arise, or if temporary energy shortages curtail production. Demand will be flat to negative in Europe, the United States and mainland China. Demand was already forecast to decline slightly, and the war will undercut even more. 

Prices for aluminum have been revised up because of conflict-related higher energy prices and damage to facilities in the Gulf region. Copper prices have been revised down because of lower-than-expected increases from the Middle East conflict.

Prices for aluminum will remain elevated through 2026 on a combination of higher energy costs and reduced supply — both consequences of the Middle East conflict. At the same time, the conflict is hurting global economic growth, which will reduce demand for aluminum. Today, even with a two-week ceasefire in place, transport through the Strait of Hormuz has been significantly curtailed and energy prices have continued to rise to hit new highs. This points to support for prices through the second quarter of 2026, even if there is an imminent, comprehensive resolution to the conflict.

Copper prices will ease over 2026 as supply concerns diminish, demand weakens and financial speculation steps back to historic levels. As expected, the ongoing Middle East conflict has not brought as much upward price pressure, but disrupted trade and higher energy costs will support prices over 2026.

--With contributions from Keyla Goodno and Emiliano Pérez