Oil price losses were pared back after U.S. President Trump stated America must respond to the Iranian attack. Copper prices closed essentially flat after giving up earlier gains as Middle East tensions showed renewed signs of strain. Gold and silver prices extended their declines as investors refocused on long-term energy market supply tightness that could lead to higher interest rates.
Crude Oil
Oil prices fell but trimmed deeper losses after a volatile session, following U.S. President Donald Trump's statement that America must respond to the downing of a U.S. military helicopter, reigniting fears that the U.S. and Iran could fall back into conflict and prolong the global energy crisis.
The global benchmark Brent crude fell 3%, settling above $91 per barrel, while West Texas Intermediate (WTI) also fell 3%, settling above $88 per barrel.
Trump's accusation that Iran shot down an Apache helicopter near Oman raised market concerns over the stability of the fragile ceasefire and the prospects for peace deal negotiations with Tehran. The conflict, which began in late February, triggered the largest oil supply disruption in history and fueled global inflation.
"This only shows that we are not as close to a deal as the headlines might suggest," said Ryan McKay, senior commodity strategist at TD Securities.
Nevertheless, Trump did not specify the form the response would take, and so far, the ceasefire has held despite numerous clashes between the warring parties and fighting between Israel and Iran. Iran's foreign minister posted on social media that "foreign forces near our territory are always at risk."
These comments disrupted an earlier steady decline in oil prices, which had been driven by increasing signs of sharply falling demand offsetting supply losses from the effective closure of the Strait of Hormuz, a critical energy transit chokepoint.
A plunge in purchases by the world's largest crude importer, coupled with record U.S. exports and releases from emergency reserves, have provided much-needed relief to global oil supplies. While prices remain well above pre-war levels, they are far below the highs touched in recent months.
Further signs suggest shipping flows through the Strait of Hormuz may be recovering. Kuwait's supply of crude to Asian refineries indicates that transit through this key chokepoint is resuming.
However, even if a deal is ultimately reached, a full normalization of oil flows remains a distant prospect. Mines in the Strait of Hormuz would need clearing, shuttered oil fields could take months to restart, and damage to energy infrastructure from drone and missile attacks would require repair.
"Crude took us on another rollercoaster ride today, another clear reminder not to trade on headlines," said Mark Malek, Chief Investment Officer at Muriel Siebert & Co. "Keep a box of Dramamine on the desk — the motion sickness is likely to continue."
The WTI July futures contract fell 3.4% to settle at $88.20 per barrel.
The Brent August contract fell 3% to settle at $91.45 per barrel.
Base Metals
Copper prices closed largely unchanged after surrendering earlier gains as Middle East tensions flared up again.
Copper had risen as much as 1.2%, supported by the price-boosting effect of the global AI investment supercycle, which offset disruptions from the Iran war. This trend is favorable for industrial metals demand.
Nonetheless, U.S. President Trump's accusation that Iran downed a U.S. military helicopter and his statement that America must respond renewed tensions in the region.
At the close, LME copper was essentially flat at $13,615 per metric ton.
LME aluminum fell 1.6% to $3,547.5 per metric ton.
LME zinc rose 0.5% to $3,555.5 per metric ton.
LME tin rose 0.4% to $52,502 per metric ton.
LME lead fell 0.3% to $1,984 per metric ton.
Precious Metals
Gold and silver prices fell further as renewed Middle East tensions prompted investors to refocus on long-term energy supply tightness that could lead to higher interest rates.
Trump had earlier accused Iran of downing a U.S. military helicopter near Oman and stated America "must respond." This rhetoric triggered a market reaction and posed a fresh threat to the peace deal he had claimed for weeks was imminent.
Trump's comments fueled fears of a potential restart of U.S.-Iran conflict, which has already caused the largest historical oil supply disruption and sparked global inflation. This situation increases the likelihood that central banks will hold rates steady or raise them, which is a negative for precious metals.
As of 4:18 PM Eastern Time, spot gold was down 1.6% at $4,259.81 per ounce.
Spot silver was down 4.2% at $65.3102 per ounce.
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