Gold, the Fed and the Limits of the Lever
7 Oct 2026 Gold has lost roughly a quarter of its value since January, in the middle of a war. The explanation lies less in the Gulf than in Washington – and in a lesson first taught in 1979. A haven that stopped behaving like one Gold is supposed to rise as the world grows more dangerous. On the 221st day of the conflict between the United States and Iran, it is doing the opposite. Having touched a record of around $5,600 an ounce in late January, the metal now trades near $4,180 – roughly a quarter lower – and at the end of September it fell to a seven-week low. Writing for Investing.com this week, the analyst Satendra Singh reaches for the obvious parallel: the seizure of the US embassy in Tehran in November 1979 and the 444 days that followed. The comparison is instructive, though not quite for the reason usually given. The crisis of 1979 was a hostage standoff, not a war. Gold surged regardless, reaching $850 an ounce on 21 January 1980. Then it fell away, and went on falling. Diplomacy did not break the rally – the hostages remained in captivity for a further year. The price of money did. The price of money On 6 October 1979 – forty-seven years ago this week – Paul Volcker’s Federal Reserve abandoned gradualism. It set out to control the supply of money directly and let interest rates find their own level. They found it near 20 per cent. In March 1980 President Carter added credit controls of his own, which deepened a downturn and were dismantled within months. Inflation eventually broke. So did gold. The mechanism at work today is the same one, in a lower key. The war disrupted traffic through the Strait of Hormuz and carried Brent crude from around $73 a barrel to $118 by late April. US consumer price inflation reached 4.2 per cent in May, with energy the principal cause. The Federal Reserve, now chaired by Kevin Warsh, responded in September by raising rates to a range of 3.75–4.00 per cent. The vote was unanimous, and 16 of its 18 policymakers expect at least one further rise before the year is out. The next decision falls on 27–28 October. Gold pays no interest. When cash and bonds pay more, and the dollar firms, the cost of holding it rises. The conflict, in other words, is weighing on gold by way of inflation: the market is trading the central bank’s response to the war rather than the war itself. Whose hand is on the lever? It is tempting to speak of a president reviving a Carter-era playbook. The phrase assumes that the playbook is his to open. For the most part, it is not. Fiscal policy belongs largely to Congress, and a federal deficit in the region of 6 per cent of GDP leaves little room for manoeuvre in any case. What remains to the White House is persuasion, appointment and pressure – real influences, but not controls. Monetary policy belongs to the Federal Reserve. President Trump has argued that rates should stand at 1 per cent or lower; the chairman he chose has raised them. The echo of 1979 is exact in one respect only: Carter appointed Volcker, and it was Volcker’s medicine, not Carter’s, that the economy swallowed. The one lever that is unmistakably the President’s is the war. At a rally in Nebraska on Monday he described higher prices as “a small price to pay” and said the conflict would be over very soon. If that proves right, the reopening of Hormuz would do more to lower inflation, and with it interest rates, than any instruction to the central bank. That is a matter of diplomacy, not macroeconomic management. What it means For commodity traders. Dollar funding is becoming dearer at the very moment that energy, freight and feedstock prices remain volatile. Working capital costs more, and a firm dollar bears down on buyers in import-dependent markets, not least across West and Southern Africa. In such conditions the tenor of financing, the depth of counterparty relationships and the discipline of hedging count for more than any directional view. Hormuz remains the barometer. For investors. Gold is not a hedge against bad news as such. It protects against falling real yields and a weakening currency; it offers little shelter from a central bank intent on restoring both. Those who bought at the peak in 1980 waited nearly three decades to see that price again. The difference today is that central banks themselves remain steady buyers, which lends the metal a support it lacked then. For savers. Higher rates are, at last, a headline in their favour. The figure that matters, however, is the real return. A deposit paying 4 per cent while prices rise by 4 per cent is merely standing still. The lesson of 1979 is not that history repeats. It is that the crisis was brought to an end by a central banker in Washington and by negotiators in Algiers. Neither was pulling a presidential lever. This article is commentary and does not constitute investment advice.
The Lights Go Out in Hull: How Energy Costs Are Redrawing the Chemical Map
23 September 2026 There is a particular silence to a mothballed chemical plant. The flares die and the pipework cools, and a site built to run without pause for decades simply stops. This week, that silence descended on Saltend, on the north bank of the Humber, where Ineos began idling its three acetyls plants. Two have already ceased production and the third will follow within days. They will remain idle until further notice. What makes the moment significant is not only what these plants make but what they were. According to Ineos, they are the last world-scale acetyls units left in Europe. Every other producer on the continent has already closed, and each closure was blamed on the same thing: energy costs that could not be competed with. A problem of physics as much as price The chemistry explains the vulnerability. At Saltend, natural gas is both the energy that drives the process and the feedstock from which acetic acid, acetic anhydride and ethyl acetate are made. When gas prices rise, the whole operation becomes uneconomic, however modern the equipment or efficient the process. Prices have risen sharply. Wholesale gas in Britain and Europe has almost doubled since July, as disruption to oil and gas flows through the Strait of Hormuz has rippled through global energy markets. “I’m sure people will find it hard to believe that we are being forced to mothball some of the most efficient plants in Europe but with gas prices now 12 times the level in the US and 8 times that of China, we just cannot compete,” said Sir Jim Ratcliffe, founder and chairman of Ineos. That 12-to-one ratio is Ineos’s own calculation. Independent market data put the gap between British and American gas nearer eight to ten times, depending on the hub and contract measured. On any measure, it is a chasm that no operational excellence can bridge. Part of a pattern, not an isolated event Hull is not an outlier. Yara mothballed its ammonia plant on the same Saltend site in early 2025. Ineos closed Britain’s last synthetic ethanol plant at Grangemouth. The acetyls business itself cut a fifth of its workforce last year. Each decision on its own might be read as a single company’s commercial choice. Taken together, they describe a structural shift: gas-based chemical production is leaving Europe. Ineos has not closed the door entirely. It is reportedly exploring direct purchases of American liquefied natural gas, a process that could take up to a year, and could restart if prices ease. It is also calling on the UK and EU to impose tariffs on Chinese imports. For now, however, a region that consumes these chemicals in large volumes no longer makes them at scale. Where the molecules go next Acetyls are rarely headline news, but they are everywhere. Acetic acid feeds coatings, adhesives and food production. Acetic anhydride is essential to pharmaceuticals, aspirin among them. Ethyl acetate is a workhorse solvent in printing inks, laminating adhesives and flexible packaging. The European manufacturers who depended on Hull have not stopped needing these materials. They have simply started looking elsewhere, to the United States, China, the Middle East and Asia more widely. That search has consequences well beyond Europe. When one major region turns to the global market in a hurry, cargoes are redirected, prices firm and lead times lengthen, including in markets that never bought from Hull. If tariffs are imposed, Chinese product shut out of Europe will seek homes elsewhere, including across Africa and Latin America. There is also a regulatory dimension. Acetic anhydride is a controlled drug precursor, so replacing supply from new origins requires rigorous licensing and end-user checks. “What happened in Hull this week will be felt far beyond Humberside,” said Russell Brill, Director of Purchasing at Gapuma Group. “When a region loses its last major source of a basic chemical, buyers do not stop needing it; they go looking elsewhere, and they all go looking at once. Our job is to make sure our customers are not caught in that rush: to know every credible origin, to secure volumes early and to be straight with people about where prices are heading.” The barometer moves At Gapuma, we have long treated the Strait of Hormuz as a barometer for the direction of global trade and finance. Most of the time, its readings show up in freight rates and insurance premiums. This week, the reading appeared somewhere far less expected: in a quiet chemical park in East Yorkshire. The lesson is uncomfortable but clear. Where chemistry gets made is increasingly decided by the price of energy, and that price is increasingly decided by geopolitics. As regional production gives way to longer, multi-origin supply chains, the distributor’s role changes. It is no longer simply a middleman. It is a shock absorber, a navigator and, at times, the difference between a production line that runs and one that stops. Hull’s plants may yet restart. Until they do, the gap they leave will be filled by those who saw it coming.
Dire Straits: The Hormuz Stalemate at Six Months
7 September 2026 The Strait of Hormuz has burned again. On Saturday, Iran’s Revolutionary Guard said it had struck three oil tankers and three US-linked vessels in the waterway, in retaliation for fresh American strikes on Iranian tankers earlier the same day, including the crude carrier M/T Kylo. It is the latest exchange in a confrontation that has now run for over six months, since the United States and Israel opened their campaign against Iran on 28 February, and it comes after barely a month of relative calm. We return to this story, as we have done repeatedly over the past six months, not simply because the flashpoint recurs, but because Hormuz has proved itself a genuine barometer for the direction of global trade and finance. Freight rates, insurance premiums, oil and gas prices, and by extension inflation expectations and interest rate decisions worldwide, all take their cue from what happens in this one stretch of water. Few single chokepoints tell you as much, as quickly, about where the global economy is heading. The toll is no longer abstract. The crisis has claimed twenty seafarers and one port worker, with thirty-five more injured; Iran alone struck at least thirteen commercial vessels in August, including a strike on the tanker MT Sidr that killed two crew. Traffic through the Strait, which normally carries around a quarter of the world’s seaborne oil trade and close to a fifth of its liquefied natural gas, remains a fraction of its pre-crisis volume, and increasingly hard to verify: with more vessels switching off their transponders to avoid becoming targets, even Washington’s own figures on daily barrel flows are treated with scepticism by independent maritime analysts. Markets have responded in the only language they know. Brent crude has posted a third straight daily gain, quoted around $79 a barrel by XTB, while broader crude benchmarks tracked by Trading Economics were up roughly nine per cent on the week and trading closer to $91. The World Bank now expects energy prices to surge 24 per cent this year, the sharpest rise since Russia’s invasion of Ukraine, and overall commodity prices to climb 16 per cent, driven by energy, fertiliser and record metal prices. None of that is contained to the Gulf: it is arriving at exactly the moment the Federal Reserve and the Bank of Japan are trying to judge whether inflation is beaten or merely resting, with Friday’s US inflation print now doing double duty as a bellwether for both monetary policy and the price of keeping ships moving through Hormuz. Has a resolution become more plausible, or less? The honest answer is: less, for now, though not for want of trying. Delegations from Washington and Tehran did sit down in June around a memorandum of understanding meant to end the war; the Islamabad Talks in the spring produced their own short-lived ceasefire; the two governments have between them stood up a Persian Gulf Strait Authority and an Islamabad Memorandum as embryonic institutional scaffolding; and as recently as 25 August, the US Navy confirmed it had cleared the Strait’s principal shipping lane of more than a hundred suspected mines. Each of these is a genuine, if partial, achievement. But each has also been followed, within weeks, by a fresh exchange of fire, and this weekend’s strikes on tankers and US-linked vessels suggest the underlying dispute, over who controls passage through Hormuz, remains as unresolved as it was in February. That is the real cost of stalemate: not only the lives already lost and the tankers already burned, but a global economy that cannot fully exhale. Insurers cannot fully price Gulf risk while ceasefires keep breaking. Central banks cannot fully relax while a fifth of the world’s LNG and a quarter of its seaborne oil sit hostage to one of the narrowest, most contested shipping lanes on Earth. And companies across the commodities and chemicals trade, ourselves included, cannot plan a “normal” that keeps receding by another month, then another. A durable settlement, whatever shape it eventually takes, is not simply a diplomatic nicety; it is the precondition for the world’s freight rates, feedstock costs and interest rate decisions to return to something like predictability. Until then, the bill for uncertainty keeps being paid, by shipowners, by insurers, by consumers, and by every business that trades across this most contested of waterways. This is the latest in our ongoing coverage of the Strait of Hormuz crisis and its implications for global trade.
Has Oil Stopped Reacting to Politics – and Started Steering It?
4 August 2026 Brent and WTI rebounded on Tuesday, clawing back part of Monday’s sharp sell-off, with Brent trading back above $84 a barrel. Traders were left questioning whether the market had priced in a diplomatic breakthrough that, according to Tehran, does not exist. It is the latest lurch in a pattern that has defined the Strait of Hormuz crisis for months: political announcements moving crude by five, six, even seven per cent in a single session, only to reverse within a day. Monday’s decline followed President Trump’s claim that talks with Iran would resume. It unwound within twenty-four hours once Iran’s foreign ministry denied any such negotiations were under way, and a vessel was struck near Hormuz for good measure. The rhythm is now familiar enough that analysts increasingly suspect political messaging is being timed to the market itself, rather than the market simply reacting to political fact. As Kyle Rodda, senior market analyst at capital.com, put it: “Fridays are for fighting but Mondays are for the markets in Trump’s world.” It is a wry line, but it captures something real – the choreography of threat and climbdown looks increasingly calibrated to price, not the reverse. Tehran itself has accused Washington of using announcements to move financial markets rather than negotiate in good faith. Whatever the accusation’s merit, it reinforces the sense that political rhetoric is now tracking the oil price rather than setting it. Layer in OPEC+’s steady supply increases and forecasts from Goldman Sachs and Kotak Securities pointing to a cooling market into 2027, and a fragile picture emerges: crude’s fundamentals argue for lower prices, while its politics argue for volatility. For traders, distributors and buyers across the commodities and chemicals supply chain, the lesson is discipline. Headlines can move price faster than verified cargo data ever will, and a rally built on a denied negotiation is not a rally built to last. At Gapuma, we watch the shipping lanes and the barrels – not just the briefings.
The Barrel: The last place the story shows up
9 July 2026 When the US–Iran ceasefire collapsed in the Strait of Hormuz this week, the headlines went straight to price. Brent ticked up, then wobbled either way, and most commentary moved on. But for the companies that actually move oil, gas and chemicals through that water, the price is not the problem. The problem is everything sitting underneath it. Hormuz carries roughly a fifth of the world’s seaborne oil and LNG. That makes route reliability a commercial contract in its own right, and it is precisely the thing a trader cannot hedge. You can hedge crude. You cannot hedge a captain who refuses to enter a severe-risk zone, an insurer who rewrites a war-risk exclusion overnight, or a payment rail that quietly narrows while your cargo is still mid-voyage. That last point is the one keeping people up. A US general licence opened a legal corridor for Iranian oil on 21 June. Within roughly a fortnight it was revoked and replaced with a wind-down order. Legal permission, it turns out, is not the same as bankable confidence, and each transaction now carries a lifecycle risk that is far harder to price than the commodity itself. This is why so many commodities businesses are in a genuine tailspin right now. The instinct is to watch the screen. But the screen is a lagging indicator. A vessel that turns back, an insurer that hesitates, a bank that declines a settlement, none of it registers immediately as a shortage. It registers as friction. Friction compounds quietly, and by the time it reaches the price, the decision you needed to make was already late. The firms that come through this well will not be the ones with the best price call. They will be the ones who treated the route, the licence and the counterparty as three separate clocks, and started tracking all three before the market did. Strategy in this environment is not prediction. It is knowing which questions to ask, and asking them early. Gapuma Group | Trading commodities and speciality chemicals across international markets, with a clear read on the ground beneath the price.
The relief is real… The certainty is not
1st July 2026 For four months, the price of oil has told the story of a war few people expected and fewer still know how to end. Now, as June closes, that story appears to be turning: Brent has slipped to around $73 a barrel, its steepest monthly fall since the pandemic and its worst quarter in six years. Petrol stations, freight desks and finance directors across the trading world are, for the first time since February, allowed to exhale. But exhaling is not the same as trusting what comes next. The rally in supply behind this fall in price is genuine enough. Tankers are moving through the Strait of Hormuz again, sanction waivers have loosened Iranian barrels back into a starved market, and the diplomatic language out of Washington and Tehran has, briefly, softened. Yet scratch beneath the relief and the foundations look considerably less solid than the headline number suggests. The current arrangement holding the strait open is not a settlement; it is a temporary courtesy, with Iran having agreed to forgo transit fees for just sixty days and reserving the right to reinstate them the moment that window closes. A ceasefire with an expiry date is not peace. It is an interval. It is worth asking, too, who is actually behind the falling price, because the answer is not simply optimism. Much of this year’s most consistent buying came from trend-following hedge funds, the quiet, algorithm-driven money that piled into long oil positions as the conflict escalated in spring. That money is now heading for the exit, not because the war is over, but because the trade has stopped trending. What looks like the market voting for peace is, in no small part, funds voting to bank their profits before the next headline turns against them. This is a market that has grown fluent in front-running its own volatility. Even regulators have taken notice: several unusually well-timed bets against oil, placed in the minutes before key American statements on Iran this year, are now the subject of scrutiny. Ask a commodities desk how confident it feels and the honesty is telling. Callum Macpherson, head of commodities at Investec, described the situation bluntly as ultimately unsustainable, adding that markets are simply finding ways to muddle through, because the ordinary business of buying cargoes and hedging exposure cannot pause for a war to make up its mind. That, in a sentence, is the position every trading, logistics and distribution business now finds itself in. So can this easing be relied upon as the basis for forward strategy? Not yet, and arguably not for some time. A lower oil price today buys breathing room, not certainty. Freight contracts, insurance premiums and supplier terms still need to be built for a strait that could tighten again with a single statement out of Washington or Tehran. The prudent response is not to chase the rally down, but to hedge as though the ceasefire is what it has repeatedly proven itself to be this year: fragile, reversible and provisional. The deal may hold. History this year suggests we should not assume it will.
🛢️ GAPUMA GROUP | MARKET INTELLIGENCE | 20 MAY 2026
Hormuz, Beijing and Moscow: The Geopolitics of Oil Are Being Rewritten in Real Time The movement of two Chinese supertankers through the Strait of Hormuz today – the Yuan Gui Yang and Ocean Lily, carrying approximately 4 million barrels of crude after waiting in the Gulf for more than two months – has sent an immediate and unmistakeable signal to commodity markets. Brent crude fell to as low as $110.16 a barrel on the news. This is not merely a shipping story. It is a geopolitical statement. The vessels’ passage comes as President Trump and President Xi concluded a two-day summit in Beijing, with a White House official describing the talks as “good.” US Treasury Secretary Scott Bessent told CNBC that China would work behind the scenes to help reopen the strait, noting that Beijing has “a much bigger interest in reopening the strait than the US does.” Beijing, characteristically, said nothing publicly about Hormuz – Chinese state media reported only that the leaders “exchanged views on major international and regional issues, such as the Middle East situation.” Silence, in diplomacy, is often the loudest language. Iran has reportedly sought to implement a toll system for vessels crossing Hormuz – a brazen assertion of sovereign authority over an international waterway that carries roughly a fifth of the world’s oil supply. That Chinese-flagged supertankers are now moving freely while broader restrictions remain in place is a pointed reminder of where true leverage lies. Meanwhile, closer to home, Prime Minister Keir Starmer has authorised the import of Russian-refined diesel and jet fuel into the UK indefinitely, alongside a temporary licence permitting the maritime transport of Russian LNG from the Sakhalin-2 and Yamal terminals. The government frames it as pragmatism. Treasury Minister Dan Tomlinson told Sky News the government was “acting pragmatically to insulate British citizens from the economic fallout of the Middle East conflict.” Critics – not least opposition leader Kemi Badenoch – see it differently: as analysts have noted, from Moscow’s perspective, it demonstrates that Western countries are “not that committed to a sanctions regime” when their own consumers feel the pinch. The broader picture is stark. Global oil supply has declined by 12.8 mb/d in total since February, with output from Gulf countries affected by the Strait’s closure running 14.4 mb/d below pre-war levels. The IEA projects a decline of 3.9 mb/d on average across 2026, assuming flows gradually resume from June. The United Nations has already cut its global growth forecast to 2.5% this year, against an estimated 3% last year, citing higher energy costs and weaker trade. For commodities and futures desks, the key questions now are whether today’s tanker movements represent a genuine reopening or a bilateral Chinese carve-out – and whether the gap between the two matters less than markets think. Wood Mackenzie has estimated Brent could approach $200 a barrel if the Strait remains largely shut until the end of the year. The downside scenario, by contrast, assumes a rapid diplomatic resolution that supply chains are ill-prepared to absorb smoothly. At Gapuma Group, we are watching these developments closely across energy, commodities and futures markets. The rules of the game are changing – and the players setting them are not all where they used to be. For market intelligence, trading insights and strategic analysis, connect with the Gapuma Group team.
The Emperor Comes to Beijing — Without His Clothes
14 May 2026 By: Shahab MOSSAVAT When Donald Trump first touched down in Beijing in November 2017, Xi Jinping laid on the full theatre of imperial hospitality: a private dinner in the Forbidden City, a parade through Tiananmen Square, and the announcement of $250 billion in business deals – a figure so grand it dwarfed the entire annual GDP of West Virginia, where one of its headline memoranda of understanding was supposedly centred. Almost none of it materialised. The symbolism, however, was exquisitely chosen. China was telling the world – and telling Trump – who was truly in charge. Nine years on, the pageantry at Beijing Capital International Airport on Wednesday – the honour guard, the schoolchildren chanting in Mandarin, the skyscrapers lit with welcoming characters – carried an almost identical message, delivered with rather more pointed subtlety. Air Force One landed, and a US president who had spent his first term threatening to break China, and his second term actually trying to, stepped onto a red carpet laid by a nation that had absorbed his blows, weaponised its advantages in response, and emerged from the encounter structurally stronger. Donald Trump is greeted at Beijing airport by Chinese Vice President Han Zheng The shift in the bilateral power dynamic is not subtle. It is measurable, documented and, for Washington, deeply uncomfortable. When Trump arrived in 2017, the United States still held most of the conventional cards: it was the world’s pre-eminent consumer market, the anchor of the dollar-denominated global financial system, and the unchallenged custodian of the rules-based international order. China was formidable but still, in important respects, dependent – on American technology, American markets and American acquiescence. Trump’s instinct, brutal in its simplicity, was to exploit that dependency through tariffs. What he did not foresee was that a decade of patient strategic investment had quietly altered the underlying geometry. Consider the arithmetic of the current summit. Trump arrives in Beijing wanting concessions: market entry for American companies, Chinese purchases of Boeing aircraft and US soybeans, a softening of rare earth export restrictions that brought his own industrial economy to the edge of a supply crisis. Xi, by contrast, wants stability – time to consolidate a technological and industrial position that has already, by most independent assessments, reached escape velocity. The asymmetry is telling. One leader is shopping for wins to take home to voters ahead of bruising midterm elections. The other is managing a civilisational project measured in decades. Scott Kennedy, senior adviser and trustee chair in Chinese Business and Economics at the Centre for Strategic and International Studies in Washington, put it with characteristic precision in CNBC on the day the summit opened: “China comes into this meeting far more confident than in 2017, when it feared even a small rise in US tariffs. In the last year, Xi has been able to push back and neutralise much of Trump’s actions.” 2017 v 2026: Change in Body Language? Central to China’s structural advantage is its commanding position in the global shipping and logistics system – a dominance so comprehensive that it shapes the price of practically everything that moves by sea. By mid-2024, China had invested in ports in 16 of the top 20 nations for shipping connectivity. Roughly 27 per cent of global container trade now passes through terminals partly or wholly owned by Chinese or Hong Kong-based companies. In 2024 alone, China’s largest state-owned shipbuilder produced more commercial tonnage than the entire United States shipbuilding industry has delivered since the Second World War. Shanghai handled 51.5 million TEUs in 2024, making it the world’s busiest port – five times the throughput of Los Angeles and Long Beach combined. When China flexes its position in containerised freight, it is not merely adjusting a commercial variable. It is moving a lever that governs global commodity pricing across industries from automotive parts to pharmaceuticals, from agricultural produce to consumer electronics. The United States, which conducts the overwhelming majority of its trade by sea, sits downstream of that lever. Underpinning this logistical supremacy is a strategic energy architecture that took shape long before Trump’s tariff wars began. China’s early and consistent investment in Iranian crude – formalised in the 25-year, $400 billion cooperation agreement whose foundations Xi Jinping himself proposed during a 2016 visit to Tehran – secured access to oil trading at an $8–10 discount per barrel below global benchmarks. While Western economies lurched from one energy shock to the next, buffeted by sanctions regimes and geopolitical crises they themselves often authored, Beijing was buying Iranian crude at predictable, heavily discounted rates through independent refiners insulated from direct sanction exposure. More broadly, Xi’s decade-long programme of energy self-sufficiency – wind, solar, hydropower, domestic drilling and diversified import partnerships – has positioned China to weather disruptions that send other economies into crisis. The current US-Israel war against Iran, which has blockaded the Strait of Hormuz and sent global energy prices spiralling, is a case in point. China’s energy fortress, as analysts at Columbia University’s Centre on Global Energy Policy have noted, appears to be passing its sternest test. That cannot be said of the United States. Yangshan: The world’s busiest container port handling more than 50 million TEUs annually The technological transformation is perhaps the most significant shift of all. China is no longer, in any meaningful sense, the cheap-labour assembly floor of the global economy. Its “Made in China 2025” industrial strategy has delivered on its core promises with a thoroughness that has alarmed Western analysts. China now leads the world in industrial robotics installations, dominates the clean technology supply chain from lithium batteries to solar panels, and – with DeepSeek’s R1 model launching in early 2025 to international astonishment – has demonstrated serious, applied artificial intelligence capability that challenges American primacy in what was supposed to be a US-led domain. In rare earths, which sit at the chokepoint of every advanced technology from fighter jets to electric vehicles to AI semiconductors, Beijing controls 85–90 per cent of […]
The Strait That Broke the World’s Confidence
17 March 2026 The Strait of Hormuz – a corridor barely 33 miles wide at its narrowest – has not just closed to commercial traffic. It has exposed the paper-thin foundation on which the modern world’s energy economy is built. At Gapuma Group, we are watching this unfold in real time. The disruption is not abstract. It is operational. War risk insurance has been cancelled wholesale by underwriters. Freight rates on some routes have surged by over 600%. Several of our counterparties in the region cannot get cover at any premium. Ships that could move cargo are sitting still because no insurer will touch them. The numbers behind the closure are stark. Around a quarter of the world’s daily oil consumption and a fifth of its LNG pass through that single waterway. Qatar has halted LNG production. Iraq has cut crude output. Jet fuel premiums in Europe and Asia have hit record highs. TTF gas prices rallied 70% in less than a week. But beyond the immediate crisis lies the more troubling long-term question: should we still be this exposed? The Gulf states have spent the last decade building a compelling alternative model – the “Dubai model” of tourism, logistics, and technology. The World Bank and World Economic Forum were praising their economic resilience as recently as late 2025. That narrative has aged badly in a fortnight. The honest answer is that a post-oil world is desirable, inevitable – and currently unaffordable at the speed events are demanding. Renewables cannot be scaled overnight. Biofuels offer partial relief – and notably, marine biofuels have held steady where fossil fuel equivalents have spiralled. But the infrastructure, the capital, and the political will for genuine energy independence remain incomplete. For commodities trading, the lesson is blunt: diversification of supply, route, and risk is not a future aspiration. It is an immediate imperative.
RAN, OIL AND THE ART OF THE CONVENIENT CRISIS
19 February 2026 Brent crude pushed above $71.50 yesterday. WTI broke $66. A 4% surge in a single session, with more to follow in early European trading. The headlines wrote themselves: US-Iran tensions, Strait of Hormuz fears, military build-up in the Persian Gulf. All of that is real. But is geopolitical risk genuinely driving this spike, or is it doing the market a useful favour — providing cover for something more structurally inconvenient? Here is the problem the oil market does not particularly want to discuss. The IEA’s implied surplus for 2026 has ballooned to nearly 4 million barrels per day – driven by OPEC+ unwinding its production cuts and relentless output growth from the United States, Canada, Brazil, Guyana and Argentina. Global demand growth is forecast at just 930,000 barrels per day – tepid, weighed down by EV adoption, improving vehicle efficiency and anaemic economic conditions. On paper, this is one of the most oversupplied markets in recent memory. And yet here we are, with Brent at six-month highs. Iranian exports run at roughly 1.5 million barrels per day. Total flows through the Strait of Hormuz reach around 20 million barrels per day. A full-scale disruption would be seismic, potentially erasing the entire surplus at a stroke. The Iran risk is not imaginary. But what it conveniently masks is that the physical market is already tighter than balance sheets suggest – sanctioned oil finding fewer willing buyers, Indian refiners shunning Russian barrels, and the Brent forward curve sitting in backwardation well into 2028. That is not the shape of a market drowning in surplus. Geopolitical crises do not create oil market fundamentals. They temporarily obscure them. When the dust settles – as it eventually does – the surplus will still be there.