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The escalation of geopolitical tensions in the Gulf region has stirred uncertainty across global trade and commodity markets, with significant implications for metals, energy, and port operations. While the short-term disruptions are tangible, industry experts stress that the long-term resilience of trade flows will depend heavily on the speed at which the situation stabilizes.

Energy markets are already under pressure, with gas prices in Europe surging nearly 50% in recent days, while oil prices are widely expected to exceed $100 per barrel if tensions escalate further. And the ripple effect extends beyond energy. Metals such as copper, aluminum, and steel are seeing sharp price increases as supply chains face interruptions. Producers, unable to halt their operations, are forced to secure raw materials at any cost. 

The logistical bottleneck is not limited to metals. Gulf nations, including the UAE, Qatar, and Oman, are experiencing shipment delays, with normal courier and shipping services disrupted. The Strait of Hormuz handles approximately 20% of global oil exports, highlighting the global stakes of regional instability. 

Aluminium supply under severe strain

The war has caused smelter closures and “force majeure” declarations across the aluminium sector in the Middle East, threatening a supply crunch in a market where global stocks are already near historic lows. Reports say that major producers, including Aluminium Bahrain (Alba) and Qatalum, have announced they can no longer honor contracts. The Qatalum smelter began a controlled shutdown after its gas supplier, Qatar Energy, said it could no longer provide gas to the plant. Alba has also declared force majeure, while shareholder Norsk Hydro issued a similar notice to customers.

The Middle East accounts for almost 10% of global refined aluminium production, with key smelters in Bahrain, Qatar, and the United Arab Emirates. Europe and the US are major importers of aluminium from the region.

Strait of Hormuz disruption could impact up to 80% of ME metals trade 

Jawed Ahmed, CEO, Al Qaryan International, highlighted that wars and regional conflicts historically drive commodity price volatility.  

The Strait of Hormuz plays a critical role in the region’s trade. “The GCC economies sit directly along the Strait of Hormuz,” Ahmed said. “If the strait is closed for longer, shipments into and out of the region become extremely difficult.” Logistics disruptions have already prevented shipments from moving through certain ports, affecting the flow of both raw materials and finished products. 

Steel producers in Saudi Arabia, the UAE, and other Gulf countries are also vulnerable. “Many rely heavily on imported raw materials such as iron ore and direct reduced iron (DRI). If imports stop completely, steel mills may be forced to shut down within a month or more due to lack of materials,” Ahmed noted. "It's going to be at least a set back for big factories" Ports such as Jubail and Dammam (critical for steel imports) are connected to routes through the Strait of Hormuz. While alternatives like Jeddah exist, they cannot accommodate more than 20–25% additional cargo due to operational capacity, he pointed out. 

Ahmed estimates that up to 70–80% of the Middle East’s metals trade could be affected if the strait remains inaccessible, given the dependence of Gulf ports, including UAE, Qatar, Bahrain, and eastern Saudi Arabia, on this corridor.  

He observed that a swift diplomatic resolution is crucial. “Peace sooner is always better than later. If the situation continues for long, industries across the region will face serious operational challenges.” 

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Short-term disruptions, but no major trade impact yet 

According to Sanjeev Phadke, Managing Director, Metaal Europe International, conflicts of this nature will inevitably influence market sentiment and logistics operations. 

One of the primary concerns has been the perceived risk to shipping routes, which has resulted in precautionary measures from Shipping companies and the Port authorities. Surcharges from Shipping companies & Insurance companies have been already imposed or proposed. However, these surcharges are not a guarantee to get you an export schedule, which entirely depends on when the Port authorities will allow the ship movement. This uncertainty currently surrounds the logistics operations," he noted. 

“Interruptions of varying nature are not entirely uncommon in global trade, so it's too early to talk about how the current situation across the Arabian Gulf will impact the import & export trade in this region.” 

Lauds UAE leadership 

Despite these challenges, the broader business environment in the UAE remains positive. Phadke emphasised that the UAE leadership has been proactive in handling and communicating by issuing timely alerts. This positive approach has helped maintain confidence among businesses during the period of uncertainty.  

According to him, short-term delays can occur for several reasons on any given day, including vessel scheduling issues, port handling constraints, etc. As a result, a few days of disruption doesn't significantly affect trade volumes. 

The conflict has only intensified in the past few days. If the situation stabilises quickly, Phadke believes there will be little long-term impact on the trade. "Lets hope that normalcy returns soon, so the overall trade will not see any major dent.”

However, if the situation continues for an extended period, the consequences could become more serious. “If exports are delayed for too long, recyclable materials will accumulate and it might become a problem because storage capacity is limited with most of the collection & processing centers and also it will adversely affect cash flow” he said. 

From a market perspective, commodity (metals) prices have remained stable or have gained in the past one week. “Metal prices on the London Metal Exchange (LME) have shown resilience, with most metals performing well despite the geopolitical uncertainty in the region. Traditionally safe-haven commodities such as gold and silver have seen gains as anticipated. GCC being a major aluminum production area, the price of this metal has seen a sharp rise,” he observed.