The investment banking division of JPMorgan Chase is anticipating a significant surge in one commodity amidst the ongoing conflict in the Middle East.
Joseph Lupton, the co-head of economic research at J.P. Morgan, suggests that the military actions against Iran by the US and Israel could not only drive up the prices of oil and gold but also lead to an increase in aluminum prices.
“Aluminum is a market worth monitoring, especially considering the Middle East’s significant role as a producer and exporter of this base metal. With a net exportable surplus of 5 million metric tons (mmt) of primary aluminum in 2025, accounting for nearly 7% of global production, the region’s impact on aluminum prices is substantial.”
Lupton highlights that if the aluminum supply faces significant disruptions, its price could soar to around $4,000 per metric ton, marking a gain of approximately 22% from its current level of $3,282.
Lupton indicates that Brent crude oil prices are likely to continue rising if tankers are unable to navigate through the Iran-controlled Strait of Hormuz.
“A sustained reduction of about one-fifth of the supply, roughly 4 million barrels per day (mbd), could propel Brent crude prices well above $100 per barrel (bbl). While any significant changes to this year’s energy price outlook will take time, concerns about potential risks are expected to linger until the conflict eases.”
As of now, Brent crude is trading at $85 per barrel.
Regarding gold, Lupton forecasts a potential rally of 5% to 10% in the near future, aiming to reach the January high of around $5,400.
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