Hello everyone, and welcome back to our weekly editorial on geopolitics, energy, and metals.

As always, there is plenty to dig into amid tariff headlines, fresh sanctions, and souring sentiment in both U.S. equities and broad cyclical commodities.

We have visited this argument before, but it’s important to address the reasons behind the ongoing selloff in oil (and to some extent natural gas) despite somewhat positive headlines from OPEC+, fresh sanctions targeting Iran, Putin pushing back on a deal, and more tariff headlines on Canada and Mexico, increasing the likelihood of short-term supply squeezes in crude markets. The following price action is extremely telling of the underlying dynamics at play in oil, energy, and industrial metals.

While many of the initial moves in commodities were driven by supply concerns related to tariffs and the new Trump administration’s policy shifts, it’s now clear that the current dynamics are driven solely by demand. This is a combination of continued weakening growth in China and the ultimate impact of tariffs, which lower both growth and inflation—contrary to the initial assumption that tariffs would be inflationary.