Copper drops on Gulf fire exchange between US and Iran
Updated
Updated · Bloomberg · May 5
Copper drops on Gulf fire exchange between US and Iran
9 articles · Updated · Bloomberg · May 5
The metal fell as much as 1.7% on the London Metal Exchange after Monday's fighting in the Persian Gulf tested a ceasefire and unsettled markets.
US forces repelled Iranian attacks while escorting two US-flagged vessels through the Strait of Hormuz, and a drone strike hit Fujairah port in the United Arab Emirates.
The decline reversed Friday's first gain in seven sessions, highlighting how renewed risks around Gulf shipping and wider conflict are rippling through commodity markets.
After clashing in the Gulf, can a fragile new truce prevent a wider war over the world's most critical oil route?
With US warships and a $40 billion insurance fund, will ships finally risk passage through the militarized Strait of Hormuz?
Is the current US-Iran standoff an unavoidable echo of a 1953 coup, or can diplomacy break this historical cycle of conflict?
Copper Prices Plunge 7% in May 2026 Despite US-Iran Gulf Conflict: Surplus and Supply Chain Shocks Dominate
Overview
In May 2026, escalating US-Iran tensions in the Persian Gulf triggered a sharp surge in oil prices, which slowed global economic growth and increased inflation. This led the Federal Reserve to delay rate cuts and pushed bond yields higher, causing investors to unwind long copper positions and driving copper prices down below $6 per pound. Meanwhile, the Strait of Hormuz disruption halted vital energy exports and caused a severe sulfur supply shortage, threatening copper production. However, a major shift toward a copper surplus—driven by weaker demand growth, increased recycling in China, and Iran's economic collapse—overwhelmed geopolitical risk, resulting in copper's unexpected price plunge despite the conflict.