Oil Prices Slide as US-Iran Deal Hopes Resurface; Metals and Coffee Move on Supply Dynamics

Oil & Companies News — 04/08/2026

Energy: Oil Markets Face Déjà-Vu

Oil prices fell sharply on Monday amid growing optimism that the United States and Iran may be moving closer to a renewed Middle East agreement. ICE Brent crude settled more than 7% lower after President Donald Trump called off planned strikes against Iran in an effort to push a deal forward. Trump indicated that negotiations between Washington and Tehran had already resumed. Iran is one of OPEC's largest producers, and sanctions have constrained its exports for years; any sanctions relief could theoretically return meaningful volumes of crude to global supply, which is why markets react sensitively to diplomatic signals.

Iranian officials, however, continue to deny that any talks are underway. They maintain that current discussions with Oman are confined to shipping routes through the Strait of Hormuz — a chokepoint through which roughly a fifth of global oil consumption normally transits. Adding to regional tensions, reports surfaced the same day that a cargo vessel off the Omani coast was struck by an unidentified projectile.

The magnitude of the sell-off appears disproportionate given the persistent uncertainty. Similar diplomatic moments have occurred multiple times before, only to unravel. With Iran denying negotiations and Trump warning of consequences if no agreement materialises, the risk of renewed escalation remains substantial.

In the Black Sea, loading activity at the CPC terminal — which exports Kazakh oil via Russia's coast — has increased in recent days. The CPC pipeline is the primary export route for Kazakhstan, one of Central Asia's largest oil producers. Operations had been disrupted by ongoing Ukrainian strikes on Russian energy infrastructure. Risks to oil tankers operating near the terminal have left shipowners reluctant to load, and flows into the facility remain below normal levels.

European natural gas prices also declined, though less sharply than oil. The benchmark TTF contract settled 2.65% lower. Concerns are mounting in Europe over storage levels and the slow pace of injections heading into the 2026/27 winter season. Storage sits slightly above 57% capacity — below utilisation rates seen in 2021 — though in absolute volume terms it remains just above 2021 levels. Since Russia sharply curtailed pipeline gas deliveries in 2022, the EU has relied heavily on liquefied natural gas imports and diversified suppliers to replace lost volumes. EU gas demand in 2025 was 18% lower than in 2021, meaning the market, while tight, is considerably more comfortable than it was five years ago.

Metals: Gold Recovers as Energy Prices Ease

Gold edged higher, extending a recovery that began after the metal posted its first monthly gain since February in July. Prices drew support from receding geopolitical tensions in the Middle East. Diplomatic efforts to improve shipping conditions through the Strait of Hormuz contributed to the sharp drop in oil prices, and lower energy costs have alleviated some inflation concerns, creating a more favourable environment for bullion. Gold is traditionally viewed as a hedge against inflation and geopolitical uncertainty, and lower energy costs can reduce the opportunity cost of holding the non-yielding asset.

Markets are still evaluating the outlook for US monetary policy following last week's Federal Reserve meeting. Policymakers held rates unchanged, but uncertainty over the future policy path persists as investors balance lingering inflation risks against signs of slowing economic momentum. The Fed's next set of economic projections and inflation data will be closely watched for signals on whether rate cuts remain on the table in 2026.

Silver also advanced, lifted by the broader improvement in precious metals sentiment.

Gold is likely to remain torn between easing geopolitical sentiment and ongoing uncertainty surrounding US interest rates. Further declines in energy prices could improve the macroeconomic backdrop for bullion, although expectations that rates will remain elevated for an extended period may constrain gains.

In base metals, zinc rose above $3,700 per tonne, reaching its highest level in nearly four years. Zinc is primarily used to galvanise steel, making it sensitive to construction and manufacturing cycles. Tight concentrate supply continues to pressure smelter margins and constrain refined-metal output. Declining exchange inventories and signs of physical-market tightness have reinforced the rally, even amid mixed demand conditions. Tight mine supply, low treatment charges, and falling inventories are expected to support zinc prices in the near term, though weaker downstream demand may cap further upside.

Agriculture: Vietnam Coffee Exports Surge While Uganda Shipments Decline

Data from the Uganda Coffee Department Authority shows that Uganda's coffee shipments fell 24% year-on-year to 744,500 bags in June. The decline was primarily driven by traders withholding sales as global prices softened amid an improved supply outlook. Despite the year-on-year drop, coffee exports reached their highest monthly level of the 2025/26 season, with the authority attributing strong demand to improving production prospects.

Uganda's Robusta exports declined 24% year-on-year to 668,200 bags, while Arabica shipments fell 26.8% to 76,300 bags. Cumulative shipments for the 2025/26 season (October–June) totalled 5.6 million 60-kilogram bags.

Meanwhile, Vietnam's statistics office estimated July coffee exports at 396,000 tonnes — a dramatic increase of 287% year-on-year, up from 102,400 tonnes in July 2025. Vietnam is the world's largest Robusta exporter, and the surge suggests exporters are releasing stocks previously held back during earlier price spikes. Cumulative exports for the first seven months of the year reached 1.31 million tonnes, representing a 21% year-on-year increase. The divergent trends between Vietnam and Uganda illustrate how price-sensitive producing countries respond differently to softening global prices depending on inventory positions and domestic production cycles.

Source: ING