The commodities feed: Oil steadies as Middle East tensions linger

Crude oil prices recovered this morning, clawing back some of yesterday’s losses as persistent Middle East tensions continued to support risk premiums.

Energy – Russia looking to extend diesel export ban again

Crude oil prices edged higher this morning after settling 3.4% lower yesterday, as markets weighed hopes for constructive discussions at this week's UN General Assembly against ongoing Middle East supply risks. The US has also intensified pressure on Iran, warning it will shut down Iranian airlines from Wednesday and imposing additional sanctions on foreign firms doing business with Iranian carriers.

Supply-side risks remain elevated. Libya's Sharara oilfield has seen output fall to around 127k bbl/d, down from roughly 340k bbl/d, after an armed group blocked the pipeline linking the field to the Zawiya export terminal.

Meanwhile, Russia may extend its ban on most diesel exports as refinery runs remain constrained by repeated Ukrainian attacks on energy infrastructure, Bloomberg reported. Continued restrictions on Russian diesel exports have tightened refined product availability and supported gasoil and gasoline cracks in Western markets. Efforts by the US and EU to discourage attacks on energy infrastructure have yet to yield a breakthrough.

Metals – Copper nears record high

LME copper extended gains, moving closer to the record highs reached earlier this month. Improved risk sentiment, supported by stronger equity markets and lower oil prices, boosted appetite for cyclical assets, while signs of tightening supply in China provided additional support. Planned maintenance at several Chinese smelters in October and November is expected to curb refined output, while persistent congestion at Shanghai ports continues to constrain imports, reinforcing expectations of a tighter market.

Latest IAI data showed global primary aluminium production fell 1.7% year-on-year to 6.2mt in August, with output down 0.9% year-on-year to 48.6mt over the first eight months of the year. Chinese production remained resilient, rising 2.9% YoY to 3.9mt in August, while output in Europe (including Russia) increased 7.2% YoY and Asia ex-China grew 2.4%. In contrast, production weakened across most other regions, with Gulf output falling 42.6% YoY amid ongoing disruptions linked to the Iran conflict and African production declining 33% YoY.

Agriculture – US corn and soybean conditions steady

The latest USDA crop progress report showed US crop conditions remain below year-ago levels. Corn rated good-to-excellent fell to 57%, down from 66% a year ago, while soybean conditions held at 58%, compared with 61% last year. Harvest progress remains ahead of historical norms, with 13% of the corn crop and 12% of soybeans harvested, both above their respective five-year averages. Meanwhile, winter wheat plantings reached 17%, lagging both last year's pace and the five-year average.

Ukraine's Agriculture Ministry reported grain and legume exports for the 2026/27 season at 4.7mt as of 21 September, down 22% year-on-year. Corn exports nearly doubled to 1.84mt, while wheat shipments fell 44% to 2.3mt. The decline in overall exports reflects ongoing disruption to Black Sea trade flows amid continued Russian and Ukrainian attacks, which have added uncertainty to regional shipping and logistics.

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