How Will The Iran Conflict Impact Commodities

Following a US-Iran deal to reopen the Strait of Hormuz, UBS maintains a positive view on commodities as a portfolio diversifier. Fundamentals for energy and industrial metals remain robust despite expected geopolitical risk premium compression.

Key Takeaways

• 1.The US and Iran have announced a deal to reopen the Strait of Hormuz, likely reducing geopolitical risk premiums.
• 2.Commodities remain an attractive portfolio diversifier to hedge against inflation and energy supply shocks.
• 3.Fundamentals for commodities like copper and aluminum remain supportive due to structural drivers such as electrification.

Table of Contents

• How will the Iran conflict impact commodities?
• Key message
• 01 Volatility in commodities could remain elevated as the details the US Iran deal become clearer.
• 02 The geopolitical risk premium should fade, but fundamentals look supportive.
• 03 We continue to favor commodities, with a focus on active management.
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• One liner
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