Tuesday, September 01, 2026

Trump Says Venezuelan Oil Will Refill U.S. Strategic Petroleum Reserve

By Irina Slav - Aug 31, 2026

The United States will use Venezuelan crude to refill the Strategic Petroleum Reserve, President Donald Trump said on Sunday on social media.

Describing the move as a “Gift from Venezuela to the People of the United States,” President Trump said the “topping out” will begin soon, as quoted by Reuters.

The Strategic Petroleum Reserve has been drawn close to minimum operational levels amid a surge in U.S. crude oil exports in response to the crisis in the Middle East. As of August 21, per Reuters, the SPR held 290 million barrels. This was the lowest level in almost 44 years.

The “gift” that President Trump expects from Venezuela, however, may take a while to reach its destination. Venezuela exported 1.16 million barrels of crude oil daily last month, a slight decline from June’s 1.2 million barrels daily, on lower withdrawals from storage. The fact it needs draws from storage to top up exports suggests production is not rising as fast as some may hope.

There are also port capacity constraints, with reports from earlier this month saying tankers have to wait for as long as 30 days to load, as ports struggle with power outages and quality problems with the crude oil getting shipped out. Still, in July, exports to Venezuela’s biggest oil destination—the United States—averaged 786,000 barrels daily, which was the highest since early 2019.

Last week, meanwhile, news broke that the U.S. federal government is negotiating a direct ownership stake in the country’s high-yield field that contains combined reserves of 90 billion barrels of crude. Currently, Venezuela is pumping oil at a daily rate of 1.25 million barrels per day. To boost this, a lot of investments would be required, with Rystad Energy estimating the total for the next ten years at some $180 billion.

By Irina Slav for Oilprice.com

Venezuela says it will retain 'sovereignty' over its oil reserves despite US deal

By Rafael Salido

Published on 30/08/2026 - EURONEWS

Venezuela's acting president says the aim is to turn the country's underground resources into a "source of social and economic well-being for the people of Venezuela."

Venezuela's acting President Delcy Rodríguez said on Saturday that the country would retain "sovereignty" over its oil resources despite a new agreement with the US that grants Washington significant access to the South American nation's reserves.

"One thing must be absolutely clear: Venezuela retains ownership and sovereignty over its resources," Rodríguez said in a speech broadcast on state television.

Under the terms of the agreement, which was announced by US President Donald Trump on Friday, the US is set to take control of 65 billion barrels of Venezuela's oil reserves.

According to Rodríguez, the deal also "calls for the development of 17 strategic fields" and could see investment of "more than $100 billion, and more than $209 billion in taxes for the state."

Rodríguez says the aim is to turn Venezuela's underground resources into a "source of social and economic well-being for the people of Venezuela."

However, some have accused the government of a lack of transparency surrounding the deal, with questions also being raised on social media about whether it will truly benefit Venezuelans.

The agreement comes after more than a decade of struggling to attract investment amid a deep economic crisis in the country.

Some analysts have now welcomed the US' role as a "guarantor" for investments into Venezuela, which has the world's largest proven reserves.

"Without this, these fields would not be developed over the next 10 or 15 years," Oswaldo Felizzola, a professor at the Institute of Advanced Studies in Administration (IESA), told AFP, adding that Venezuela's state-owned energy firm Petróleos de Venezuela "does not have the financial resources to do so."

Oil production in Venezuela rose by 29.8% between January and July, reaching 1.2 million barrels a day, although it remains well below the three million barrels a day recorded 25 years ago.

Rodríguez has introduced reforms in the mining and oil sectors to facilitate the entry of private and foreign capital, while Washington has relaxed sanctions on Venezuela's oil sector.

In a post on X, US Secretary of State Marco Rubio hailed the deal as a "huge win for both the American and Venezuelan people."

"It demonstrates how President Trump's bold foreign policy is driving America First wins: securing stable reserves and low-cost oil in our Hemisphere and lowering gas prices here at home," he wrote.

What we know about Trump’s deal giving the US access to Venezuela’s oil

By Angela Barnes with AP

Published on 31/08/2026 - EURONEWS

Besides a social media post from US President Donald Trump, the White House has said little about what he is calling “the biggest oil deal in world history” in Venezuela.

Trump said the agreement announced on Friday night would give the United States a stake in Venezuela’s vast oil reserves, a step towards his goal of extracting energy from the country after American forces captured then-President Nicolás Maduro in a middle-of-the-night raid in January and brought him to New York to face federal drug trafficking charges.

Venezuela’s interim leader, Delcy Rodríguez, described the deal as a step towards economic recovery that will modernise the country’s oil industry. In a televised address to the nation late on Sunday, Rodríguez insisted Venezuela's sovereignty is secure and said she wants the country to become a global energy powerhouse.

Earlier on Saturday, she said the oil reserves would “cease to be an inert, cold statistic and will instead become concrete solutions. Housing is one of them.”

But the answers to many questions, including how soon the reserves could be drilled and who will pay to make it happen, were not immediately clear. No text of any agreement has been released.

Here's a look at what is known and unknown:

What are the terms?

The US government and an unnamed private operator in Venezuela formed a new company that was given rights to develop untapped oil fields.

A statement from Rodríguez said the deal involves the development of 17 fields with a proven potential of 65 billion barrels. It said the agreement could draw $100 billion (€86 billion) in investment into Venezuela’s oil industry and yield more than $209 billion (€180 billion) in taxes for Caracas.

Trump said the agreement was negotiated by Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and Rodríguez.

The deal gives the United States 55% effective output of the new private company, including an ownership stake and rights to buy oil at cost. American purchases of the oil will go towards the US Strategic Petroleum Reserve along with the military, according to a US official who was not authorised to discuss the matter publicly and spoke on the condition of anonymity.

The company would be the second-largest corporate holder of proven reserves after Saudi Aramco, according to the official.

How will Venezuelans react?

Some in Venezuela considered it a betrayal of what their government has stated repeatedly for decades: Venezuelan resources are for Venezuela, and leaders would not allow the US government access to those resources.

Harvard University professor Ricardo Hausmann, a former Venezuelan planning minister, called it a “shameful deal."

“Venezuelans will not respect this illegitimate deal and no major US oil company will take it seriously because they know it will not last,” Hausmann said on social media, adding that Rodríguez “has no legitimacy or constitutional power to commit Venezuela to any such deal."

In her national address, Rodríguez pushed back on some of the early criticism.

“One thing must be absolutely clear: Venezuela retains ownership and sovereignty over its resources,” Rodríguez said. She said the goal is to reach other agreements with transnational private companies such as Chevron, Repsol and Shell.

She added: “We want to be an energy powerhouse, a major oil producer, a significant gas exporter, and a major national petrochemical developer."

What's the reaction on Capitol Hill?

It is unclear whether Congress will play a role in the arrangement, but lawmakers from both parties were quick to weigh in.

Trump allies called it a win.

Sen. Bernie Moreno, R-Ohio, said it was a historic deal that helps both countries. “If it were up to DC Democrats, Maduro would still be in power, Venezuelan oil would be going to China at half price, and the people of Venezuela would be getting robbed by a corrupt regime,” Moreno wrote on social media.

It was condemned by Democrats who said Maduro's capture was a means to this end.

Sen. Tim Kaine, D-Va., said Trump was always after Venezuela's oil, branding it “corruption at epic scale.”

“Will prices come down for Americans? Who knows but likely not as much as Trump has forced them up thru his idiotic Iran War," Kaine said on social media.

Sen. Chris Van Hollen, D-Md., said Trump “put our service members at risk to get Venezuelan oil for his billionaire buddies.”

What questions remain?

Many important details remain unclear, including who will cover necessary investments, the identity of the private operator and how America’s stake in the company breaks down.

The US will get 55% of the company's effective output, but it was not clear what portion of that comes from an ownership stake and how much comes from the right to buy oil at cost.

It also is unclear how the industry will react. Persuading big American oil companies to return to the region could prove a challenge given the political uncertainty and damaged infrastructure.

Chevron, the only US oil company actively producing in Venezuela, declined to comment. Separately from Trump’s announcement, Chevron already had been in talks to expand investment in the country. Exxon Mobil also declined to comment.

David Oxley, chief climate and commodities economist at Capital Economics, said that on its face, the deal could double US oil reserves and reduce dependence on crude oil from Canada and Mexico. But Oxley, writing in a commentary, cautioned that there are logistical hurdles and said the value of Venezuela's reserves may have been exaggerated under former President Hugo Chávez.

Even with legal and security guarantees, it is not clear that US oil companies “would be eager to invest,’’ he wrote, noting that “there simply might be more enticing commercial opportunities on offer elsewhere.’’

Trade Analyst: Tariffs Cost Americans $200 Billion A Year, Add $147 To School Supplies

August 30, 2026
The Center Square
By Morgan Sweeney

Key Takeaways:

NTU’s Bryan Riley says tariffs add about $200 billion a year to U.S. costs and hit back-to-school goods; one trade analyst puts the extra at about $147 per family.

Item estimates include roughly $18.80 more for sports shoes, $4.90 for calculators, $0.85 for notebooks, and $5.13 for clothes—small per item but large for districts buying at scale.

Economist Orphe Divounguy cites BLS data that the same household basket costs about $2,900 more than a year ago, and lists tariffs plus spending, rates, and energy as joint pressures.

(The Center Square) – Tariffs will cost Americans about $200 billion per year, according to the National Taxpayers Union, and school supplies aren’t exempt from the heightened costs getting passed on to the American consumer.

As summer winds down and students head back to the classroom, parents are paying more to fill their carts with notebooks, backpacks and other school supplies – about $147 more, according to one trade analyst.

The Center Square’s Greg Bishop spoke Thursday with Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative, on The Center Square’s news show “The States” about how tariffs are affecting the economy.

“Almost everything is driven up by the cost of tariffs,” Riley told Bishop.

But costs aren’t driven up uniformly, Riley said. Tariffs impact some goods more than others.

“In some cases, it’s a big chunk. For clothing, it’s a big chunk. In other cases, it’s kind of like getting nickel-and-dimed. Everything, almost everything, costs a little bit more, and it’s a policy that really hurts those lower income households the most, who are least able to afford the cost of the tariffs,” Riley said.

The National Taxpayers Union calculated the added cost to some common kids’ items around this time of year – things like new shoes for sports, calculators, notebooks, writing utensils and new clothes.

On average, tariffs have added $18.80 to the cost of sports footwear, $4.90 to calculators, $0.85 to notebooks and $5.13 to clothing. The average cost of writing utensils increased slightly, from $0.1 to $0.5.

“One of the defenses of these tariffs historically has been, ‘Oh, it’s just a little bit, and you won’t even notice it when you buy that can of food and when you buy that pack of pencils. But it all adds up,” Riley said.

And that added cost can be especially substantial when the buyer is a school district, which is supported by taxpayer dollars.

“Go to the grocery store, buy a can of beans. It’s not going to affect you much. But if you’re a school district and you’re feeding thousands of kids, that really affects your bottom line, and it directly comes out of the taxpayers’ wallet,” Riley said.

Bishop also spoke to economist Orphe Divounguy after the Bureau of Labor Statistics released its Personal Income and Outlays report for July.

Divounguy confirmed what consumers are feeling: Costs are rising.

“The average household is spending roughly $2,900 more per year to buy the same basket of goods than they did a year ago,” Divounguy said.

But Divounguy also noted other factors besides tariffs.

“You have record government spending that’s pushing interest rates higher. You have the war on the other side of the world that’s affecting oil prices,” Divounguy said.

“If you look at the overall economy right now, if you look at Q2 GDP numbers, what you see is that outside of AI spending, the AI build-out, there isn’t much else growing in this economy anymore, and I think that is concerning,” Divounguy said. “Unless you get relief on the tariff front, unless you get relief on the gas front and oil, the energy front, unless you get government to make some adjustments that will result in lower interest rates, not higher interest rates, the consumer is going to continue to feel the pinch.”

About The Center Square
The Center Square was launched in May 2019 to fulfill the need for high-quality statehouse and statewide news across the United States. The focus of their work is state- and local-level government and economic reporting.
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Europe is heading into winter waiting for Qatari gas that is not coming back

A Macro-Advisory note argues traders have been holding out for the Gulf war to end. Doha says repairs may take up to three years, and the EU bans Russian LNG on 1 January. / bne IntelliNewsFacebook

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By Ben Aris in Berlin August 29, 2026

Europe's gas traders have spent the summer betting that the Gulf war would end before the heating season starts, giving them time enough to restock Europe’s gas tanks. That bet has gone badly.

European gas storage currently stands at about 63% of capacity against a five-year average of 79%. Macro-Advisory, the Eurasia consultancy, said in EU Gas Dilemma note published in August that governments "may very soon force traders to start buying." And that could be very expensive. Investment banks are starting to warn of a repeat of the 2022 energy crisis with price of gas tripling to over €100/MWh once the weather turns colder, which will "start an LNG price war with Asian buyers".

Gas in Europe and LNG in Asia both cost just over double what they did a year ago.

The big change from 2022 is that not only has Europe largely been cut off from Russian gas, but this year the LNG supplies from Qatar have also disappeared thank to the Iran war. Doha says it cannot resume exports because of damage sustained to its Ras Laffan LNG plant, with full repair at 12 to 36 months out. “If that is right, the market has been pricing a supply return that is one to three years away as though it were weeks away,” and the storage deficit is the accumulated cost of the error.

Not all of Europe’s gas tanks are empty. As IntelliNews reported, many countries like Italy and Poland are on track to hit the EU’s mandatory benchmark of 90% full by November 1. Italy was about 82% full and France 67%. The problem children are Germany with 51% and the Netherlands with only 45% of tanks capacity used. Germany is the vulnerable one and also the largest in Europe, but high prices have prevented traders from buying gas during the restocking summer season.

The deficit has raised the risk of power outages in some EU states this winter, according to Macro Advisors, depending on the weather, and "for 100% certain, the price of electricity will be higher".

Then there is the sanctions timetable. The EU has legislated Russian gas out of existence and will ban imports of Russian gas completely by January 1. Short-term LNG contracts have been banned since April 25; all LNG imports go on January 1, 2027; long-term pipeline contracts follow on September 30, 2027, or November 1 if member states face severe storage emergencies.

So, buyers are loading up while it is still legal. The EU bought €809mn ($942mn) of Russian LNG in June, 57% more than a year earlier, giving Russia 24.1% of the bloc's LNG market by value against the US on 54.3%. Belgium - the seat of EU executive and legislative power - was the single biggest buyer at €268mn ($312mn), ahead of France on €258mn ($300mn) and Spain on €201mn ($234mn), and it overtook France and Hungary as the largest buyer of Russian gas of any kind.

Pipeline flows tell the same story in the other direction. The bloc imported a further €542mn ($631mn) of Russian pipeline gas in June, 12.5% of the value of all pipeline gas imports, with Norway leading on 33.3%, Algeria on 23.6% and the UK on 18.8%. TurkStream is the only route still carrying Russian pipeline gas into Europe. Hungary remains the largest buyer at €1.3bn ($1.5bn) in the first half, down 12.5% y/y, then Bulgaria on €704mn ($820mn) and Greece on €539mn ($628mn).

Across the first half Russian LNG purchases came to €4.5bn ($5.24bn) and total EU spending on Russian gas of all kinds fell just 3.4% y/y to €7.4bn ($8.62bn). June volumes of Russian LNG were 2.17 bcm, up 10%, on Bruegel figures. "Volumes rising into those deadlines look less like weaning and more like stocking up while it is still legal," the note says.

Where the EU's gas came from in July 2026. Pipelines were 61.3% of the total and LNG 38.7%; Russia supplied 6.7% by pipeline and 6.0% as LNG. Source: Kpler, ENTSOG and EOA, 2026, via Macro-Advisory.

With Europe threatening ban Russian gas completely, Putin turned the tables on Europe and threatened to cut Europe off early rather than wait to be pushed. That would exacerbate the potential crisis as Europe remains addicted to Russian gas. Deputy Prime Minister Alexander Novak said Russian companies would redirect LNG to China, India, Thailand and the Philippines. Russia supplied Europe with 38 bcm of gas in 2025, just over 20 bcm of it as LNG.

The alternatives all fail on timing rather than on volume. New US LNG capacity arrives too late for this winter and perhaps for 2027-28, and Washington has warned it may restrict exports as data centres and AI drive domestic power demand. Azerbaijan is promising more piped gas but the TAP and TANAP pipeline projects need significant capacity upgrades first, which takes "several years". Turkmenistan has the reserves and sells over 80% of its gas to China, but it is on the wrong side of the Caspian: a new trans-Caspian pipeline, or an LNG plant in Turkey, is still at the talking stage because nobody will commit until they know when Gulf supply returns.

Every one of those routes is waiting on the same unknowns, which is why none of them is being built.

Macro Advisory has also flagged a competitiveness argument that outlasts the winter. If Russia sells its LNG into Asia at prices below what the US charges Europe, European chemicals and other energy-intensive manufacturers face a permanent cost gap against Asian competitors - a structural transfer rather than a seasonal one.

Weather decides the rest, IntelliNews Lambda recently reported in a deep dive into the gas sector. Inventories are at their lowest in 17 years and available supply is tighter than in 2022, with under three months to the heating season. What a cold winter does is not push up prices per se, but empties the tanks out faster; the danger this year is with low storage the space underneath the gas market was already a lot shallower than normal.

The wider gas crisis now runs through a single chokepoint, and Europe's answer to losing Russian pipeline gas was to buy a seaborne commodity whose route Iran controls. The sanctions deadlines were written when Qatar was the swing producer and will now go into effect when Qatari gas is off the market.

Asian Refiners Turn to Argentina as Iran War Disrupts Oil Supply

By Tsvetana Paraskova - Aug 31, 2026

Asian crude oil importers, including China, Japan, and South Korea, have turned to buying oil from as far as Argentina to offset supply losses from the Middle East, anonymous traders with knowledge of the purchases told Bloomberg on Monday.

Refiners in Asia, which have relied on the Middle East for a large part of their term supplies before the Iran war, are now scouring the global crude oil market for alternative barrels that do not need to pass through the Strait of Hormuz or other geopolitical hotspots, or take a month longer to deliver from the Red Sea via the Mediterranean and the Cape of Good Hope in Africa.

Argentina fits the bill, and some refiners in Asia have bought cargoes from the South American producer.

In recent weeks, refiners in Asia have bought Argentina’s Medanito crude, and at least one cargo of the oil comparable to the U.S. West Texas Intermediate loaded earlier in August, according to Bloomberg’s sources.

Medanito is being produced at the Vaca Muerta shale basin, the heart of Argentina's oil boom, where oil and gas production has been rising in recent years.

Argentina’s oil sales in Asia have jumped this year from 2025, and from no exports at all until 2024, according to Argentinian government data compiled by Bloomberg.

Argentina’s Medanito crude travels to Asia around South America and into the Pacific, without having to pass through any chokepoint or canal, such as the Panama Canal or the Suez Canal. This chokepoint-free trade route has apparently raised the Asian appetite for Argentinian oil, which is also close to the U.S. WTI in quality, a grade that’s also become more popular in Asia since the Iran war broke out.

Medanito is being sold at a discount of $1-$2 per barrel versus WTI, the trade sources told Bloomberg.

Other South American producers, including Brazil and Venezuela, have also become popular among Asian refiners, who seek to minimize the risk of relying on Middle East oil too much.

By Tsvetana Paraskova for Oilprice.com

The world has spent its emergency oil, the only stockpile growing is Iran's

Ten of the eleven biggest holders of strategic crude drew their reserves down in the second quarter. The one that grew is under naval blockade. / bne IntelliNewsFacebook

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By Ben Aris in Berlin August 29, 2026

Six months into the war around the Strait of Hormuz, the world's emergency oil reserves are close to spent. They are being drawn down faster than at any time since they were built, and the buffer they were meant to provide has largely gone.

Ten of the eleven countries holding the largest strategic stockpiles shrank them in the second quarter. Between them, the ten non-Chinese holders gave up 185mn barrels, a 16% draw in three months. The United States drew 22%, Japan 29%, Saudi Arabia 16%, the UAE 15% and South Korea 12%.

The eleventh, Iran, went the other way. Its strategic inventory rose from 74mn barrels to 88mn, up 18.9%, over the three months its exports collapsed to almost nothing under the US naval blockade. Iran can still pump; it cannot ship. The oil has nowhere to go, so it stays home and counts as reserve.

The drawdowns are setting the world up for a new oil price spike, the problem is being little discussed and not reflected in the current oil prices, which remain in the mid$80s for now. Reserve releases were the West's answer to the chokepoint closing. They have calmed the markets over the last six months with some extreme predictions of oil prices jumping to a much as $350 per barrel failing to appear. However, as the reserves are depleted it is not clear if the markets will remain calm in the next six months if there is no end to the conflict.

America's barrels are a loan, not a sale

The 122mn barrels the United States has taken out of its Strategic Petroleum Reserve since March have to go back, with interest paid in oil.

The release is not a sale. The Energy Information Administration's own explainer says it "is structured as an exchange, which requires the original volume of oil, plus additional barrels, to be returned to the SPR at a later date". A Government Accountability Office report in May described the whole 172mn barrel drawdown as "emergency exchanges rather than sales". The companies that took the nation's emergency oil owe it back, plus extra.

The reserve peaked at 415.4mn barrels on March 20. By August 14 it was 293.4mn. That is 71% of what Washington committed to the international release, which means roughly 50mn barrels are still to go out of the door.

Two things follow that nobody has priced. When the exchanges unwind, refiners have to hand back more crude than they took, into a market that will still be short - so the SPR's recovery is itself a future call on supply. And a reserve that is contractually owed back is not a reserve that can be spent again in the meantime.

Crude for a diesel problem

All 172.2mn barrels of the American contribution were crude, all of it from public stocks, and it was the largest single line in the IEA’s 426mn barrel international programme – the largest in history - in which the next biggest was Japan at 79.8mn.

The shortage is in refined product. On July 21 the International Energy Agency's executive director said in writing that markets for diesel and gasoline were "considerably tighter than those for crude".

There is a reason the American contribution had to be crude: the country holds almost no emergency product. The Northeast gasoline reserve was sold off by act of Congress in 2024, and the same statute bars the energy secretary from creating a new regional product reserve without a line in the president's budget. What is left is one million barrels of heating oil in four New England terminals.

Releasing crude into a diesel shortage is the policy equivalent of sending flour to a bread queue. It helps, eventually, if there is a refinery with spare capacity in the right place - and the Asian refiners that would normally do that work are the ones the war has hit hardest.

China's share rises without China buying anything

China's stocks fell too, by 49mn barrels. But that is 3.2%, roughly a fifth of the rate everyone else was spending at, and China is still 95mn barrels above where it sat at the end of last year.

So, China's share of the tracked total rose from 57% to 61% in a single quarter without Beijing buying a barrel. Everyone else simply spent faster.

The EIA counts China's commercial inventories as strategic, because Chinese state oil companies have been instructed since 2024 to hold emergency barrels commercially. It refuses that treatment to every other country in the table, including Japan, whose mandated private stocks it leaves out. The comparison is tilted before a single barrel is counted.

China is not an IEA member. It is an association country under a 2015 declaration that describes the relationship as "non-binding", and the 90-day stockholding obligation applies to members. Whatever Beijing has, it has no legal duty to release.

Japan stops drawing

Japan will make no further releases from its national reserve in September or October, economy, trade and industry minister Ryosei Akazawa said on August 25.

September crude procurement is expected to fall to about 80% of last year's average monthly level, from 100% in August, because tankers that would normally pass through the Bab el-Mandeb Strait are going the long way round via Suez - 55 days to Japan against 21 to 23, Akazawa told a press conference.

"Of the national reserves for which a release has already been decided, there remains a portion that has not been utilised due to progress in securing alternative supplies. Using that portion would ensure [September] crude oil supply equivalent to an average month last year," he said, adding that procurement should return to last year's average monthly level in October.

Tokyo is saying it can cover September out of what it has already authorised. But that means Japan is husbanding what is left rather than finding an alternative supply. And it comes after the steepest quarterly draw of any major holder.

UBS Says a Major Commodity Upcycle Is Taking Shape

By ZeroHedge - Aug 30, 2026

UBS is urging investors to position for a commodity upcycle, driven by electrification, AI infrastructure, rising power demand, supply constraints and years of underinvestment.
Gold, energy and industrial metals remain particularly attractive, with geopolitical risks supporting energy while copper benefits from structural demand and looming supply deficits.
The broader commodity rally is already accelerating, with the Quantix Commodity Index at a record high and Jeff Currie warning that the era of abundant physical resources may be ending.

One day after veteran commodities strategist Jeff Currie told investors to "get long and buckle up" for the next leg of the commodities rally, UBS strategist Sagar Khandelwal issued a similarly bullish call, urging clients to "position for a commodity upcycle."

Khandelwal said electrification, surging power demand, artificial-intelligence infrastructure spending, persistent supply constraints, and years of underinvestment are converging to create a perfect storm for a sustained upcycle in hard assets.

Commodities can generate returns while protecting portfolios against energy disruptions and renewed inflation, he said. That defensive role becomes valuable when the toxic mixture starts hitting stocks and bonds.

Here's how the UBS strategist framed the trade:

Position for commodity upside

We believe commodities can provide both a structural source of return and portfolio protection in scenarios where higher inflation expectations challenge equities and bonds. While commodities have historically offered valuable diversification benefits due to their relatively low correlation with traditional asset classes, we also see a supportive longer-term backdrop driven by electrification, rising power demand, AI infrastructure investment, and supply constraints across several markets. In our view, investors should maintain diversified exposure across precious metals, energy, industrial metals, and agriculture to capture a broad range of opportunities. Given fast-shifting leadership within commodity markets, we think an actively managed approach can help investors navigate the commodity upcycle.

Gold

Gold has resumed its upward trend as US inflation concerns have ebbed, and markets have reined in expectations for near-term Federal Reserve rate hikes. Looking ahead, however, we believe central bank demand, continued diversification away from the US dollar, and global debt concerns will remain important structural supports. For investors with substantial gains following the strong rally over the past year, higher prices may provide an opportunity to rebalance some exposure into other commodity sectors. We continue to view gold as a useful strategic diversifier, and we remain constructive on gold prices over the next 12 months.

Energy

The ongoing conflict between the US and Iran highlights the fluid nature of geopolitical events and how they can impact energy. With crude supply remaining restricted and both sides facing constraints in reaching a compromise, uncertainty over how quickly shipping conditions and production will normalize is likely to keep energy markets sensitive. In our view, energy exposure can help protect against lingering supply uncertainty and inflation spillovers, while robust demand supports a constructive medium-term outlook.

Industrial metals

Industrial metals, such as copper, have benefited from secular demand drivers such as electrification, the energy transition, and the ongoing global buildout of AI infrastructure. Prices have remained resilient despite periodic global economic growth worries. While factors like tariffs and trade policy risks may keep prices volatile in the near term, demand trends remain constructive for the asset class over the longer term. In copper specifically, supply constraints and projected market deficits reinforce our positive longer-term outlook.

A look at the Quantix Commodity Index Total Return shows that the broad commodity complex has surged to a record high, gaining more than 22.5% since late June. The index tracks 24 US-dollar-denominated futures across energy, agriculture, livestock, industrial metals, and precious metals, suggesting the rally is no longer confined to a single corner of the physical world.

That momentum in the commodities index reinforces veteran Currie's warning last week that "scarcity in the physical world" is reemerging. Already, we're seeing London copper trading above $14,000 a ton, the Bloomberg Agriculture Spot Index breaking out to a three-year high, and European tungsten prices exceeding $3,000 a ton.

Currie's conclusion was very blunt: "The illusion of abundance is likely behind us."

By Zerohedge.com

Iran War Adds $330 Billion to Global Energy Import Bill

By Irina Slav - Aug 29, 2026

The Iran war added an estimated $330 billion to global oil, fuel and LNG import bills between March and August, with crude accounting for nearly half the increase.
Europe suffered the biggest hit at $78 billion, followed by China at $35 billion and India at $22 billion, reflecting their heavy dependence on imported energy.
The pain could persist even after the war ends, as elevated LNG prices and damaged Middle Eastern and Russian refining capacity keep global fuel supplies tight.

The war between the United States, Israel, and Iran has caused the oil and gas import bill of the world to swell by as much as $330 billion over the six months between March and August. That’s despite a smaller-than-feared oil price climb and equally smaller-than-feared rise in gas prices. However, the war is not over yet. The bill could swell further.

The data comes from the Finland-based climate think tank Centre for Research on Energy and Clean Air, and it refers to money paid to import oil, fuels, and LNG versus what analysts had forecast as prices for the period. The outlet called the Persian Gulf disruption the biggest one since the 1990 Gulf War, with the European Union the region to suffer the most financial pain.

The biggest share of the total extra import bill came from crude oil, which accounted for $164.1 billion of the total. Next came diesel and gasoil, which accounted for $73.8 billion, and gasoline, which accounted for $35.7 billion of the total extra cost of energy imports. Liquefied natural gas was $38 billion more expensive for importers than it could have been, and jet fuel booked an extra import cost of $20 billion.

According to the figures CREA released this week, the European Union saw its energy import bill surge by $78 billion in the six months between March and August versus what analysts expected. The reason is that the EU is highly dependent on oil and gas from abroad, notably U.S. crude and liquefied natural gas, because of its sanctions on Russian hydrocarbons and the absence of any meaningful domestic production of either oil or gas. Besides, the EU’s largest local supplier of the energy commodities, Norway, has limits to how much it can export to its partner bloc.

Next on the list of biggest sufferers from the war’s impact on energy commodity prices was China, which paid an extra $35 billion over the six months to August. China is the world’s biggest crude oil importer and also the world’s biggest LNG importer. Yet China severely shrank its imports after prices surged in the wake of the first U.S. and Israeli strikes on Iran. Indeed, many analysts argue that China, in a way, saved the world from an oil price crisis by reducing imports and tapping its massive stockpiles, estimated at between 1 billion and 1.4 billion barrels as of the start of the year.

India suffered the third-strongest financial impact of the war, having to pay an extra $22 billion for its energy imports over the period under review. This is not a surprise since India is even more dependent on oil and gas imports than the member states of the European Union. India is especially dependent on oil imports, much of which it used to import from the Middle East. This made it directly vulnerable to the export flow disruption caused by Iran’s closure of the Strait of Hormuz in response to the U.S. and Israeli strikes.

Other Asian countries besides China and India also felt the pain from war-related price surges in crude oil, liquefied gas, and fuels, all paying extra billions for their hydrocarbons. The Centre for Energy Research and Clean Air noted the war and the abovementioned price surge had crimped demand for fuel commodities, reporting that their extra import bill calculations reflected what importing nations and regions actually bought and not what they would have bought had the war not begun at the end of February.

The pain is far from over, meanwhile. Over the six months to August, the price of LNG in Asia has averaged a level some 75% higher than what analysts expected for the period before the war began. In Europe, the price of liquefied gas has been 60% higher than pre-war expectations. Both prices are set to remain at current levels and may move even higher because the European Union is facing potential gas shortages unless it starts buying now for the winter, and Asian countries also need to stock up for the cold months.

Oil prices are also higher than pre-war levels, and quite considerably, while fuels have added the most—and are about to remain a lot more expensive than they were until March. The International Energy Agency estimated earlier this year that as much as a fifth of refining capacity in the Middle East, totaling some 9.6 million barrels daily, has been knocked out by hostilities. This, coupled with refinery damage in Russia from Ukrainian drone attacks, has severely constrained the world’s refining capacity, and therefore fuel output. The fuel squeeze will likely outlast the war, whenever it ends, spelling higher energy bills for importers for longer.

The little silver lining of this dark energy import bill cloud, per CREA, comes from wind and solar. These, along with other low-carbon energy sources, saved importers a total of $36 billion in the six months from March to August. It may not be a lot, but it is better than no savings at all.