MacroVoices #529 Ole S Hansen: Commodities in The Wake of The Iran Crisis
Saxo Bank's chief commodity strategist Ole Hansen joins MacroVoices to discuss how the Iran conflict is creating broad commodity market disruptions far beyond crude oil, including refined products, fertilizers, metals, and agriculture. Hansen explains how extreme backwardation in energy markets creates a powerful return tailwind for investors, and why the market may be underestimating both the duration and scope of the supply disruption.
Summary
In this episode of MacroVoices, host Eric Townsend interviews Ole Hansen, head of commodity strategy at Saxo Bank, about the sweeping market implications of the Iran-driven energy crisis. The conversation spans crude oil, refined products, fertilizers, agriculture, copper, gold, and cotton, with Hansen arguing that the disruption is far more profound than front-month oil prices suggest.
Hansen opens by emphasizing that the crisis is not merely an oil story. The Middle East has become a major hub for energy-intensive commodity production — including aluminum, fertilizers, helium, and sulfuric acid — due to abundant cheap energy from the Persian Gulf. This means the conflict is rippling into metals and agricultural markets in ways many investors have not yet appreciated. For example, 50% of the sulfuric acid used by copper miners in South America comes from the Middle East, threatening copper supply chains.
On crude oil specifically, Hansen argues that the forward curve — while showing extreme backwardation — is not fully reflecting the long-term damage. He contends that a new structural price floor has been established roughly $10-$15 higher than pre-crisis levels, suggesting Brent crude around $80 is where the new floor sits rather than the prior $60-$75 range. He also notes that U.S. shale producers have added zero new rigs and zero new barrels since the conflict began, partly because the backwardated curve makes hedging future production unattractive, and partly because U.S. production may be approaching a saturation point.
A substantial portion of the interview is devoted to explaining how commodity term structure — specifically backwardation versus contango — dramatically affects investor returns independent of spot price movements. Hansen uses Bloomberg Commodity Index data to show that from 2021 to 2026, the total return index was up 83% versus the spot index's 57%, illustrating how backwardation generates meaningful roll yield that compounds investor returns. He contrasts this with the 2016-2021 period when contango eroded returns, turning a 52% spot gain into only a 14% total return.
On fertilizers and agriculture, Hansen warns that the planting season is underway in the Northern Hemisphere with significantly reduced fertilizer availability, creating a real risk of below-average crop yields later in 2026 and into 2027. He notes that nitrogen-intensive crops like wheat are most at risk, while soybeans are least affected. He describes agricultural markets as mostly still in contango, meaning the trade opportunity is not yet as clean as in energy, but flags December corn and wheat and November soybeans as the futures contracts that would capture this year's harvest outcome. He also notes that the fertilizer shock's most acute near-term impact may be on regions closer to the Middle East — India, Africa, and eventually South America.
For copper, Hansen highlights that exchange-monitored inventories had been building but are now falling sharply in China, signaling pent-up demand returning after the price correction. He also flags the sulfuric acid supply disruption as an underappreciated constraint on copper mining output, adding a supply-side dimension to copper's already constructive demand story driven by electrification and energy transition.
On gold, Hansen describes the sharp selloff from January highs — approximately $1,500 — as a classic panic-driven liquidation of a widely-held asset, similar to gold's initial response during prior crises like the dot-com bubble and the global financial crisis. He sees gold consolidating near the 50% retracement of the selloff and the 200-day moving average, with the longer-term bull case intact but near-term direction dependent on whether inflation or growth concerns dominate. He flags $4,600 as a level where he would become more cautious.
The episode also covers cotton — which Hansen links to petrochemical-derived synthetic fiber competition — cocoa's dramatic boom-and-bust cycle driven by supply shocks and demand destruction, and the broader secular commodity supercycle, which Hansen argues may be only halfway through its current leg, driven by the energy transition's enormous commodity intensity.
In the postgame segment, Patrick Ceresna presents a Trade of the Week using a bull call spread on December 2026 WTI crude oil futures, buying the $70 call and selling the $90 call for a net debit of approximately $7.30, designed to capture upside repricing with defined risk and minimal time decay. Ceresna and Townsend also discuss equity markets — where a 23-day April rally has pushed prices to overbought levels ahead of major tech earnings — as well as ongoing dollar dynamics, uranium miners, and the 10-year Treasury yield's correlation with crude oil prices.
Key Insights
- Hansen argues that the Iran crisis is disrupting far more than crude oil — it is also affecting refined products, fertilizers, aluminum, helium, and sulfuric acid because the Middle East has become a major energy-intensive commodity production hub.
- Hansen contends that approximately half a billion barrels of oil production has gone unmade in the first two months of the conflict, materially tightening global supply and necessitating a rebuild of strategic petroleum reserves.
- Hansen claims that U.S. shale producers have added zero new rigs and zero new barrels since the conflict began, suggesting that the backwardated forward curve disincentivizes hedging future production and that U.S. output may be near a structural saturation point.
- Hansen argues that the new structural floor for Brent crude is around $80 rather than the pre-crisis $60-$75 range, meaning current December 2026 Brent futures near $80 may be underpriced given how the world has changed.
- Hansen explains that commodity term structure creates a roll yield effect where backwardation adds to investor returns on top of spot price gains — illustrated by Bloomberg Commodity Index data showing total returns of 83% versus spot returns of 57% from 2021-2026.
- Hansen warns that the fertilizer deficit during the current Northern Hemisphere planting season creates a high probability of below-normal crop yields later in 2026, with nitrogen-intensive crops like wheat most at risk, though he notes this has not yet been significantly priced into agricultural futures.
- Hansen identifies December wheat, December corn, and November soybeans as the key futures contracts for expressing a view on this year's harvest outcome, since front-month contracts primarily reflect existing inventories rather than crops being grown now.
- Hansen highlights that 50% of the sulfuric acid used by South American copper miners to extract copper from ore comes from the Middle East, creating an underappreciated supply constraint on copper production that compounds the demand-side story from electrification.
- Hansen describes gold's $1,500 selloff from January highs as a classic panic-liquidation of a widely-held asset — a pattern he says has occurred repeatedly at the onset of major crises — and sees the longer-term bull case as intact but near-term direction consolidating around the 200-day moving average.
- Hansen links cotton price support to the substitution dynamic with petrochemical-derived synthetic fibers, arguing that when energy prices rise and synthetic fiber becomes more expensive, demand shifts back toward natural cotton, underpinning cotton prices.
- Hansen argues that the global shift from just-in-time to just-in-case inventory management — driven by geopolitical supply chain disruptions — will create a structural increase in commodity demand as nations and businesses build larger buffer stocks.
- Townsend argues that if the U.S. blockade of Iranian oil exports succeeds for more than roughly two weeks, Iran would be forced to shut in its oil wells, and once shut in, restarting those wells takes months — meaning two more weeks of disruption could translate into two to three more months of global supply impact.
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