Global Resource Squeeze Signals Major Shift in Commodity Markets, Report Warns

Global competition for energy, metals and agricultural resources is reshaping commodity markets as geopolitical tensions, supply constraints and rising demand place increasing pressure on access to raw materials, according to a new report by investment firm Ninety-One.

The report identifies a shift away from the China-led commodity Supercycle of the 2000s. Today’s market is increasingly being driven by constrained supply, geopolitical fragmentation and the need for countries and companies to secure reliable access to strategic resources.

Conflicts disrupting energy supplies, growing electricity demand from artificial intelligence (AI) and data centres, and concerns over global food security are adding pressure to already stretched supply chains.

“This is the revenge of the old economy. This is not simply another commodity Supercycle. Demand is solid, but the real story is supply,” said Paul Gooden, Ninety One’s head of natural resources.

He said producers had spent much of the past decade prioritising cash flow over expansion, leaving the industry less prepared to respond to geopolitical disruption and new sources of demand.

Years of limited investment and increasingly fragmented supply chains could make the current resource pressures difficult to resolve.

AI expansion intensifies energy demand

The rapid development of AI and data centres is creating a significant new source of electricity demand, placing additional pressure on power grids already struggling to accommodate wider electrification.

According to the report, proposed data-centre projects in the United States represent approximately 200 gigawatts of potential electricity demand, equivalent to roughly 200 times the power consumption of San Francisco.

Gooden said the race to develop AI infrastructure was increasingly becoming a competition to secure sufficient energy, with companies exploring direct power generation as grid capacity comes under pressure. This could create additional opportunities for natural gas.

Meanwhile, disruption linked to the Middle East conflict and the closure of the Strait of Hormuz has exposed vulnerabilities in global oil supply.

The report estimates that global oil inventories have fallen by approximately one billion barrels since the beginning of the conflict, contributing to higher fuel costs.

The US Gulf Coast three-to-one refining crack has increased to around $45 a barrel, compared with a more typical level of approximately $20. Tanker costs for shipments between the Middle East and Asia have also climbed to about $30 a barrel, from between $2 and $3.

Gooden warned that restoring depleted inventories could take years, even if the conflict were to end immediately, creating additional demand while supply remains constrained.

Copper and gold face different market conditions

The competition for electricity and infrastructure is also reshaping metals markets, although strong prices are concealing increasingly different supply and demand conditions.

Copper inventories have risen sharply as metal is redirected towards the United States amid tariff uncertainty. At the same time, Chilean copper production has fallen to its lowest level in six years.

Ninety-One natural resources portfolio manager George Cheveley said copper’s long-term outlook remained supported by electrification and infrastructure investment, but warned that elevated prices were creating short-term risks for investors.

Gold, meanwhile, continues to benefit from central bank purchases as monetary authorities diversify their reserves amid geopolitical uncertainty.

Cheveley said sustained buying at historically high prices suggested that central bank demand represented a structural shift rather than a temporary response to geopolitical tensions. He added that mining companies’ share valuations had yet to fully reflect the stronger profitability associated with higher gold prices.

Fertiliser constraints add to food security concerns

The resource squeeze is also extending into agriculture, where higher energy costs, concentrated fertiliser production, extreme weather and tightening inventories could place additional pressure on global food supplies heading into 2027.

The Middle East is a major supplier of nitrogen fertiliser, while global potash production remains concentrated in a relatively small number of countries. Other nations are seeking to develop domestic production to reduce their dependence on imports.

Ninety One natural resources portfolio manager Dawid Heyl warned that several pressures could converge, with rising diesel and fertiliser costs already squeezing farmers.

He said a prolonged El Niño could add further pressure on agricultural yields, particularly if fertiliser availability tightens and input costs remain elevated.

The report suggests that these combined risks could mark a turning point in the agricultural cycle, with implications for production and food security in 2027.

Resource security becomes an investment priority

Ninety One’s report points to a fundamental shift in the strategic value of energy, metals and agricultural resources.

After years of underinvestment, producers may struggle to increase supply quickly enough to meet changing demand, while geopolitical fragmentation is making access to reliable resources increasingly important.

Gooden said the ability to secure and pay for essential resources could become a defining factor in the next investment cycle.