FACTBOX – Commodity prices swing as renewed US-Iran attacks disrupt energy markets

• Asian LNG jumps about 21%, while gold and silver retreat on inflation, interest-rate concerns
• International jet fuel prices increase by 6.7% compared to last week's average price

Global commodity markets have recorded sharp and contrasting movements since attacks between the US and Iran resumed six days ago, as disruption to shipping through the Strait of Hormuz intensified concerns over energy supplies, inflation and global economic activity.

Crude oil, natural gas, liquefied natural gas and aviation fuel prices rose sharply as tanker traffic through one of the world's most important energy corridors slowed to a fraction of normal levels.

The rally in energy prices also revived concerns that higher transportation and production costs could keep inflation elevated and delay interest-rate cuts by major central banks.

Gold and silver, meanwhile, retreated despite heightened geopolitical risks as rising bond-yield expectations and a stronger inflation outlook reduced demand for non-yielding precious metals.

Oil benchmarks climb more than 11%

International benchmark Brent crude traded around $85.80 per barrel Friday, up from its July 10 settlement of $76.01.

The benchmark has gained about 11.6% since the renewed attacks, reflecting a steep reduction in vessel traffic through the Strait of Hormuz and fears disruption could spread to other strategic waterways, including the Bab al-Mandeb Strait and the Red Sea.

US benchmark West Texas Intermediate traded near $80.60 per barrel, compared with $71.41 at the end of last week, representing an increase of about 11.5% over the six-day period.

The gains were driven by concerns over the movement of crude oil and refined products from Gulf producers as tankers halted voyages, made U-turns or waited outside the strait amid Iranian attacks and a renewed US blockade targeting Iran-related shipping.

The Strait of Hormuz is a critical route for oil exports from Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Qatar and Iran, leaving global prices highly sensitive to any prolonged interruption.

European gas and Asian LNG surge

The benchmark Dutch Title Transfer Facility, or TTF, natural gas contract rose to about €56 ($64) per megawatt-hour Friday.

European gas prices have climbed more than 15% this week as the disruption raised concerns over liquefied natural gas shipments from Gulf suppliers and Europe's ability to replenish storage facilities ahead of the winter heating season.

The rise came as European countries remain increasingly dependent on seaborne LNG following the sharp reduction in Russian pipeline gas supplies in recent years.

Asian LNG prices registered an even stronger increase.

The Japan-Korea Marker, the benchmark for spot LNG delivered to Northeast Asia, climbed to $19.93 per million British thermal units Thursday.

The benchmark surged 18.5% in a single session and has gained roughly 21% since the latest escalation began.

Minimal LNG tanker traffic through the Strait of Hormuz has intensified competition among Asian and European buyers for alternative cargoes from producers outside the Gulf, increasing the risk of further price volatility.

Qatar, one of the world's largest LNG exporters, ships most of its cargoes through the Strait of Hormuz, making the market particularly exposed to any prolonged closure or restriction.

Aviation fuel prices follow crude higher

International jet fuel prices averaged $127.06 Friday, according to the International Air Transport Association's Jet Fuel Monitor.

That was 6.7% above last week's average price. On a monthly basis, jet fuel prices climbed 41.1%.

Singapore jet kerosene futures, a major benchmark for the Asian aviation market, also climbed above $129 per barrel for August delivery.

The increase reflected both the rally in crude oil and concerns over the availability of refined products from Middle Eastern producers.

Persistently elevated jet fuel prices could add to airlines' operating costs and eventually feed into passenger fares, particularly on long-haul routes affected by airspace closures and diversions around conflict zones.

Gold and silver retreat despite geopolitical risks

Spot gold traded around $3,990 per ounce Friday, down from about $4,123 at the July 10 close.

The precious metal has lost about 3.5% despite the military escalation, breaking with its traditional role as a safe-haven asset during periods of geopolitical uncertainty.

Higher oil and gas prices have revived concerns over inflation and the possibility that central banks could maintain restrictive monetary policies for longer, increasing the opportunity cost of holding gold, which does not pay interest.

Silver fell to about $55.40 per ounce, compared with about $60 at the end of last week.

The metal has declined roughly 7.7% since the renewed attacks, under pressure from rising interest-rate expectations and concerns that higher energy costs could weaken manufacturing activity and industrial demand.

Unlike gold, silver is widely used in electronics, solar panels and other industrial applications, making its price more sensitive to expectations for global economic growth.

Prices were recorded during Friday trading and remain subject to rapid changes as military developments, shipping conditions and government measures affecting the Strait of Hormuz evolve.