All change: Argus looks at the stresses in commodities markets for 2026

LONDON, Dec. 11, 2025 /PRNewswire/ -- Sulphur shortages, oil surpluses, carbon costs, and the geopolitics of critical minerals and trade tariffs are all set to cast a long shadow over commodities markets in the coming 12 months. Those are among the many major issues — some more surprising than others — identified in global energy and commodity price reporting agency Argus' new Energy and Commodities horizon published today.

Argus Media chairman and chief executive Adrian Binks said: "The world has grown used to the remarkable resilience of commodities markets over the past three years. But the challenges of 2026 look set to shake things up in a way not seen since Russia went into Ukraine. And as a net importer, Europe's commodity markets look set to be in the crosshairs."

10 Key Commodity and Energy Market Themes for 2026:

1. UKRAINE of course will remain central to the fate of many markets. Supply chains for oil, coal, fertilizers, wheat, and natural gas have all reshaped themselves since 2022. If there is a peace deal, then the global flow of commodities may radically change again. Moscow is unlikely to agree to anything which does not remove sanctions and tariffs on its commodities; Europe's "once bitten twice shy" political stance may melt at the prospect of cheap diesel, or even a possible return of natural gas. That in turn could alter the picture for India, China, Brazil and the Middle East, all of whom have benefited in different ways from Europe's self-imposed Russian abstinence. And a flood of cheap oil products could spell doom for the continent's already struggling refining sector.
   
   
2. Europe ratchets up efforts to CUT CARBON EMISSIONS. The effects of the EU's Carbon Border Adjustment Mechanism (CBAM) are difficult to predict. It could drive up import costs for everything from steel to fertilizers. But a lot of smart money is on CBAM forcing a margin reduction for non-European producers competing with EU commodities that already carry a carbon tax. Uncertainty about how the mechanism will be implemented could also starkly affect the volume of imports in the first six months of 2026.
   
   
3. AVIATION faces an interesting ride as the screws tighten on carbon obligations for jet fuel. The first year of European obligations to use sustainable aviation fuel (SAF) saw SAF prices assessed by Argus fall to record lows of 2.3x conventional jet fuel, before rising to peak at more than 4x and then falling back to 3x after an influx of SAF imports in the final quarter. Volatility is likely to persist going into the second year of obligations. UK and EU regulators are pinning hope on the use of synthetic e-SAF, which is derived from clean hydrogen and Argus shows is around 13x the cost of conventional jet fuels. Ambitious mandates for e-SAF kick in over the coming years but a standoff between policy makers, producers and airlines is hindering the region's uptake of SAF and e-SAF.
   
   
4. BIOFUELS markets could be disrupted by the uneven application of differing regimes across Europe — the EU's new RED III renewable energy directive is supposed to go live in a couple of weeks, but member governments, including in Europe's biggest biofuels markets, Germany and the Netherlands, were still finalising legislation in the closing weeks of 2025 for compliance starting 1 January. Despite differing degrees of progress across EU member states, Argus expects European biofuel demand in road transportation to jump by 8% next year, driven mostly by hydrotreated vegetable oil (HVO).
   
   
5. The SULPHUR market is sounding alarm bells. Long regarded as a low-volatility oil and gas refining by-product feeding into the phosphate fertilizer market, sulphur has attained new importance because of its use in the electric vehicle (EV) battery sector — for nickel processing and LFP (lithium iron phosphate) production. Coupled with a Russian ban on sulphur exports while Moscow struggles to fix its damaged refineries, this new dynamic has pushed up Argus sulphur prices from their normal $80-180/t fob Middle East range to close to $500/t. That has serious implications for farmers around the world.
   
   
6. Geopolitics, trade wars, tariffs and sanctions will continue to dominate METALS. Critical minerals and rare earths dominated the headlines for much of this year. Despite confident noises from Washington and now Europe, there are only tentative signs of any easing of China's export controls on rare earth metals. And despite greater government support for critical mineral projects, the west's dependence on Chinese supply is not going to disappear any time soon, given the lead time involved in such complex operations. The technology and military sectors also remain in a bind, courtesy of Beijing's restrictions on exports of electronics metals such as germanium, prices for which have more than tripled to around $6,000/kg since controls were introduced in 2023.
   
   
7. In CRUDE OIL, the debate is not whether there will be a surplus, but how big it will be — Argus' own estimates point to something in the order of 1.5mn b/d. This has raised questions over whether the Opec+ group of producers, led by Saudi Arabia and Russia, can press ahead with regular output increases as it seeks to unwind some 1.65mn b/d of output cuts. The group has already agreed to pause monthly increases in the first quarter — a tacit acknowledgement of those oversupply concerns. But unless crude prices collapse to the mid-$50s/bl, Opec+ may be tempted to start opening the taps again from the second quarter, prioritising internal group harmony over propping up prices.
   
   
8. NATURAL GAS: The flexibility challenge facing European gas and global liquefied natural gas (LNG) markets may shift gear in 2026, if we see closures of some underground gas storage sites in Germany. Argus forecasts that shuttering the two German sites most at risk of closure would reduce Europe's supply buffer by the equivalent of nearly 60 LNG cargoes per year and make the continent even more reliant on LNG during the winter. Europe's gas market has been transformed since 2022 — LNG shipments have increased by nearly two-thirds and now total close to 120mn t/yr, having replaced most Russian pipeline supply. Nevertheless, in 2026, one or two large gas storage sites may close, because the difference between the price of gas in the summer and winter — how traders make money from using storage — is shrinking. If this happens, it would increase price volatility and raise the risk of price spikes, particularly in late-winter periods. LNG should be able to fill the supply gap, but it is slower to respond to price signals, and Europe potentially has to fend off competition from Asia to secure volumes. 
   
   
9. FREIGHT could return to the Red Sea. Containership owner Maersk has already indicated it is considering a return, and at least two containerships have recently sailed through the Suez Canal, which gives rise to hope that 2026 could be the year that shipowners return en masse. Tankers will be slower to respond than container vessels, as the shorter journey will generate lower profits and require higher risk. More generally in tanker markets, a shortage of available very large crude carriers (VLCCs) will push crude traders to seek smaller-sized vessels for their WTI shipments to Europe next year. A lack of recent VLCC deliveries from shipyards and booming demand for the 2mn bl ships to carry Americas crude to Asia is narrowing any economy-of-scale savings traders get with larger vessels.
   
   
10. Thermal COAL markets will be buffeted by the Ukraine conflict and pressure from global decarbonisation efforts. Any peace deal that eases sanctions on Russia could flood the market with cheap, high-quality Russian coal. This will create immense pressure on export prices in competing nations such as Australia and Indonesia, while also offering cheap base-load energy for the world's two biggest importers, China and India, and growing demand hubs in southeast Asia. Meanwhile, the pace of nuclear plant restarts in Japan and elsewhere in Asia, along with renewables growth, is encouraging more power generators to switch away from coal. That said, the thirst for power created by the expansion of AI data centres is likely to provide support and keep overall production and trade volumes hovering around 2024's record highs, when trade hit 1.1bn t and production reached 7.8bn t. A key question is whether the US coal renaissance will gather even more momentum, now that Henry Hub gas prices are back above $5/mn Btu and power demand is set to surge.

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