Page 66 - CMA Journal (Mar-Apr 2026)

F O CU S A R T ICL E

Palm oil prices increased from 1,004 USD in January 2026 to Figure 5: Global Energy Price Index & Metal Price Index (Monthly) increases in the series. This abrupt escalation coincided with global commodity dynamics, reinforcing in ationary Asian LNG Price Responses (2025–2026): A Pakistan - Pakistan experienced severe stress due to heavy
Figure 5: Global Energy Price Index & Metal Price Index (Monthly)
300.0
1,121 USD by March, indicating the transmission of energy Energy Price Index Metal Price Index major geopolitical disruptions that constrained global oil pressures, weakening growth prospects, and intensifying reliance on spot LNG markets and limited scal space. The
Similarly, the Geopolitical Risk Index demonstrated market volatility into agricultural and food commodities. Energy Price Index Metal Price Index supply, including signi cant interruptions in key export the broader environment of structural global economic Comparative Case Study March 2026 price spike strained import capacity, leading to
300.0
250.0
250.0
200.0
repeated spikes throughout 2025, rising from 113.23 in Given palm oil’s dual role as a food input and biofuel routes and production hubs and production networks. uncertainty. Japan - Japan, one of the world’s largest LNG importers, emergency LNG tenders, industrial gas rationing, and
200.0
150.0
January to 173.91 in March, surging dramatically to 222.38 feedstock, its pricing increasingly re ected developments faced acute supply security risks due to geopolitical temporary fuel switching to furnace oil and coal. The
150.0
100.0
in June, and remaining structurally elevated throughout the in energy markets, reinforcing cross commodity spillovers. A similar structural transition is observed in the Metal Price Insights about Asia LNG Price Trends disruptions in maritime corridors such as the Strait of country also expanded solar and net metering capacity as a
100.0
50.0
50.0
year. These movements highlight the intensi cation of 0.0 0.0 Index, which showed a steady upward trajectory (2025–2026) Hormuz. In response, it strengthened strategic LNG short-term hedge while seeking longer term contracts and
geopolitical tensions, military con icts, sanctions risks, and The divergence between Brent and WTI highlights growing throughout 2025, rising from 181.19 in January to 210.77 in stockpiles, expanded long term procurement contracts, and concessional nancing.
strategic competition, particularly in energy-producing segmentation in global energy markets. Brent recorded December, driven by sustained industrial demand and The observed dynamics in Asia LNG prices during improved coordination among utilities for cargo swapping Bangladesh - Bangladesh faced similar pressure due to
regions and critical maritime corridors. stronger gains due to higher exposure to maritime risk, Gulf tightening supply conditions. In 2026, the index remained 2025–2026 can be directly explained through a and emergency reallocation, maintaining stability in power spot market dependence and scal constraints. The price
generation despite global price shocks.
supply disruptions, and transport related risk premiums, elevated, increasing further to 224.18 in January, peaking at combination of structural oversupply conditions and spike triggered emergency procurement, industrial
while WTI remained comparatively supported by US price stabilization in 2025 was abruptly replaced by a 222.85 in March after sustained high levels in February abrupt geopolitical disruptions in global energy markets. South Korea - South Korea adopted a resilience-oriented rationing, and greater reliance on alternative fuels to
broad-based shock in early 2026, driven primarily by
domestic production and storage capacity. This divergence structural transi�on is observed in the Metal Price Index, which showed a steady upward (220). Unlike energy markets, metals did not experience a The global LNG market entered 2026 with a signi cant approach based on diversi ed supplier contracts, state maintain power stability, alongside a gradual shift toward
A similar structural transi�on is observed in the Metal Price Index, which showed a steady upward
A similar
contract-based LNG sourcing.
escalating geopolitical tensions, particularly in energy
trajectory throughout 2025, rising from 181.19 in January to 210.77 in December, driven by sustained
trajectory th
underscores the increasing importance of geography, roughout 2025, rising from 181.19 in January to 210.77 in December, driven by sustained sharp spike but rather a persistently high plateau, re ecting supply expansion, as approximately 93–150 mtpa of new coordinated procurement, and higher storage utilization. It
also accelerated investment in nuclear and renewable
industrial demand and �ghtening supply condi�ons. In 2026, the index remained elevated, increasing
industrial demand and �ghtening supply condi�ons. In 2026, the index remained elevated, increasing
logistics, and geopolitical exposure in price formation. producing regions and strategic maritime corridors such as ongoing pressures from industrial restructuring, supply liquefaction capacity came online across major exporting energy to reduce structural dependence on LNG imports. Sri Lanka - Sri Lanka, constrained by external imbalances,
the Strait of Hormuz.
further to 224.18 in January, peaking at 222.85 in March a�er sustained high levels in February (220).
further to 224.18 in January, peaking at 222.85 in March a�er sustained high levels in February (220). chain constraints, and increased demand from technology regions, including the United States, Qatar, Australia, and reduced LNG exposure by prioritizing fuel oil and
Overall, the simultaneous increase in commodity prices China - China, despite being the largest LNG importer, hydropower, while delaying further development of
Unlike energy markets, metals did not experience a sharp spike but rather a persistently high plateau,
Unlike energy markets, metals did not experience a sharp spike but rather a persistently high plateau,
In line with the World Bank Group’s Commodity Markets
However, despite this apparent stabilization in commodity alongside elevated levels of the Oil Price Uncertainty Index, ongoing pressures from industrial restructuring, supply chain constraints, and increased intensive sectors such as electric vehicles, data centers, and Nigeria. remained relatively resilient due to its diversi ed energy gas-based infrastructure.
reflec�ng
reflec�ng ongoing pressures from industrial restructuring, supply chain constraints, and increased
prices, major global uncertainty indicators pointed to World Policy Uncertainty Index, and Geopolitical Risk Index Outlook, the global economy entered 2026 under severe renewable energy infrastructure. This expansion, representing roughly 10 percent growth in mix, including coal, domestic gas, and pipeline imports. In Regional Impact
demand from technology intensive sectors such as electric vehicles, data centers, and renewable energy
demand from technology intensive sectors such as electric vehicles, data centers, and renewable energy
deepening systemic vulnerabilities. The Oil Price indicates a more unstable and interconnected global risk commodity stress, with energy prices projected to rise by These developments are strongly reinforced by global price global LNG supply, shifted the market fundamentally from a 2025 it opportunistically increased spot LNG purchases
infrastructure.
infrastructure.
Uncertainty Index rose sharply from 40.8 in January 2025 to environment. Commodity pricing is increasingly in uenced around 24%, reaching their highest level since 2022, while dynamics in energy and agriculture linked commodities. seller dominated structure to a buyer driven regime, where during price declines, while in 2026 it emphasized contract The 2026 LNG shock functioned as a regional stress test of
These developments are strongly reinforced by global price dynamics in energy and agriculture linked
These developments are strongly reinforced by global price dynamics in energy and agriculture linked
90.2 in March, then surged to 186.7 in June, and reached not only by traditional supply and demand factors but also overall commodity prices are expected to increase by 16%, The World Bank highlights that energy markets have prices were expected to soften due to excess availability. At diversi cation, storage expansion, and demand side energy security frameworks in Asia, revealing sharp
commodi�es. The World Bank highlights that energy markets have experienced one of the largest
commodi�es. The World Bank highlights that energy markets have experienced one of the largest
208 by December, indicating persistent instability in by geopolitical developments, strategic chokepoints, policy driven by energy, fertilizer, and metal markets. This re ects a experienced one of the largest supply shocks on record due the same time, global LNG demand growth, estimated at exibility through industrial load adjustments. divergence in resilience. Advanced economies relied on
supply shocks on record due to geopoli�cal disrup�ons, with crude oil supply reduc�ons reaching up to
hedging, storage, and supply diversi cation, while
supply shocks on record due to geopoli�cal disrup�ons, with crude oil supply reduc�ons reaching up to
market expectations despite temporary price moderation. Source: Economic Policy Uncertainty fragmentation, and nancial uncertainty. This re ects a systemic transmission of geopolitical shocks into global to geopolitical disruptions, with crude oil supply reductions around 8.5 percent in 2026, remained concentrated in India - India faced rising import costs and responded by developing economies depended on demand compression,
10 million barrels per day at peak stress levels. Brent crude prices, which had averaged around USD 69
10 million barrels per day at peak stress levels. Brent crude prices, which had averaged around USD 69
Together, the simultaneous elevation of OPU, WPUI, and structural shift toward a more volatile and unpredictable pricing systems rather than isolated market movements. reaching up to 10 million barrels per day at peak stress emerging Asian economies but was insu cient to fully diversifying LNG sourcing toward the United States, Qatar, fuel substitution, and emergency procurement. This
per barrel in 2025, surged to an expected average of USD 86 per barrel in 2026, with temporary spikes
GPR throughout 2025 indicates that while commodity global economic setting. per barrel in 2025, surged to an expected average of USD 86 per barrel in 2026, with temporary spikes levels. Brent crude prices, which had averaged around USD absorb the supply surge, while Europe’s imports stabilized and Australia. At the same time, it accelerated renewable highlights how geopolitical risk ampli es existing structural
significantly higher during acute disrup�on phases.
The Global Energy Price Index illustrates this transition
prices appeared to stabilize temporarily, the structural significantly higher during acute disrup�on phases. 69 per barrel in 2025, surged to an expected average of USD and China’s recovery remained gradual and uneven. These energy expansion and maintained coal-based backup inequalities in energy security and nancial capacity across
clearly. After declining from 188.6 in January 2025 to 154.2
The spillover effects extend beyond energy into fer�lizers, food security, and industrial inputs. Fer�lizer
underpinnings of global markets were increasingly Global Commodity Shock & Energy-Metal in May 2025, and further easing to 147.4 by December 2025, strial inputs. Fer�lizer 86 per barrel in 2026, with temporary spikes signi cantly conditions explain the relatively range bound and declining generation to reduce exposure to price volatility. the region.
The spillover effects extend beyond energy into fer�lizers, food security, and indu
prices are projected to rise by 31% in 2026, while base metals and precious metals are reaching historic
destabilized by uncertainty, policy fragmentation, and Stress (2025–2026) prices are projected to rise by 31% in 2026, while base metals and precious metal higher during acute disruption phases. price pattern observed through most of 2025 and early
highs, reflec�ng both industrial demand and heightened demand for safe havs are reaching historic
energy markets initially re ected post crisis stabilization, en assets. These price
geopolitical stress. highs, reflec�ng both industrial demand and heightened demand for safe haven assets. These price 2026.
movements are further amplified by strong transmission effects across commodity classes, where oil
moderating demand, and relatively balanced supply
Global commodity markets during 2025–2026 re ect a clear The spillover e ects extend beyond energy into fertilizers,
price shocks propagate into natural gas and fer�lizer markets, intensifying infla�onary pressures
movements are further amplified by strong transmission effects across commodity classes, where oil
This fragility became more visible in early 2026, when the transition from cyclical normalization to geopolitically conditions. However, this trend reversed sharply in 2026, food security, and industrial inputs. Fertilizer prices are However, this structurally bearish outlook was disrupted by
globally.
price shocks propagate into natural gas and fer�lizer markets, intensifying
global economy entered a period of heightened volatility in driven structural instability. This shift is evident across with the index surging from 153.7 in January to 242.3 in infla�onary pressures projected to rise by 31% in 2026, while base metals and acute geopolitical tensions a ecting key maritime energy
globally.
The structural nature of this vola�lity is further evident in the interac�on between energy and metal
commodity markets driven by geopolitical shocks. Brent energy, metals, and related input markets, where initial March 2026, marking one of the steepest quarterly precious metals are reaching historic highs, re ecting both routes, particularly chokepoints such as the Strait of
Insights about Asia LNG Price Trends (2025–2026)
markets. While 2025 reflected divergence—energy prices declining while metal prices steadily
crude surged from 64.6 USD in January 2026 to 99.4 USD by The structural nature of this vola�lity is further evident in the interac�on between energy and metal industrial demand and heightened demand for safe haven Hormuz, which handles a signi cant share of global LNG
increased—2026 marks a synchronized escala�on phase, where both indices remain elevated under
The observed dynamics in Asia LNG prices during 2025–2026 can be directly explained through a
March, while WTI increased from 59.9 to 91.4 USD over the markets. While 2025 reflected divergence—energy prices declining while metal prices steadily assets. These price movements are further ampli ed by trade. These disruptions introduced shipping risk
combina�on of structural oversupply condi�ons and abrupt geopoli�cal disrup�ons in global energy
the influence of geopoli�cal fragmenta�on and supply chain disrup�ons. This convergence highlights a
markets. The global LNG market entered 2026 with a significant supply expansion, as approximately
same period. Simultaneously, the Oil Price Uncertainty increased—2026 marks a synchronized escala�on phase, where both indices remain elevated under strong transmission e ects across commodity classes, premiums, cargo diversions, and short-term supply
cri�cal structural shi�: commodity markets are no longer independently driven by supply and demand
93–150 mtpa of new liquefac�on capacity came online across major expor�ng regions, including the
Index rose sharply from 142.2 in January 2026 to 773.5 in the influence of geopoli�cal fragmenta�on and supply chain disrup�ons. This convergence highlights a where oil price shocks propagate into natural gas and bottlenecks, while LNG’s inherently low short run supply
United States, Qatar, Australia, and Nigeria.
fundamentals but are increasingly shaped by interconnected geopoli�cal and financial risk factors.
This expansion, represen�ng roughly 10 percent growth in global LNG supply, shi�ed the market
Source: Economic Policy Uncertainty March, the highest level in the observed series, re ecting cri�cal structural shi�: commodity markets are no longer independently driven by supply and demand fertilizer markets, intensifying in ationary pressures elasticity ampli ed the impact of these shocks. As a result,
fundamentally from a seller dominated structure to a buyer driven regime, where prices were expected
Overall, the evidence confirms that global energy and metal markets have entered a high vola�lity
to so�en due to excess availability. At the same �me, global LNG demand growth, es�mated at around
The World Policy Uncertainty Index (GDP-weighted extreme instability in energy market expectations. fundamentals but are increasingly shaped by interconnected geopoli�cal and financial risk factors. globally. despite underlying oversupply conditions, the Asia LNG
regime characterized by persistent external shocks, elevated price levels, and reduced predictability.
8.5 percent in 2026, remained concentrated in emerging Asian economies but was insufficient to fully
average) also showed sustained escalation, rising from The World Policy Uncertainty Index, although lower than its Overall, the evidence confirms that global energy and metal markets have entered a high vola�lity The structural nature of this volatility is further evident in market experienced a sharp nonlinear price spike in March
absorb the supply surge, while Europe’s imports stabilized and China’s recovery remained gradual and
The transi�on from stabiliza�on in 2025 to synchronized escala�on in 2026 underscores that
uneven. These condi�ons explain the rela�vely range bound and declining price pa�ern observed
25,719.7 in January 2025 to 77,304.6 by September before 2025 peak, remained signi cantly elevated at 39,788.0 in regime characterized by persistent external shocks, elevated price levels, and reduced predictability. the interaction between energy and metal markets. While 2026, rising by 93.58 percent in a single month. This
geopoli�cal risk has become the dominant force shaping global commodity dynamics, reinforcing
through most of 2025 and early 2026.
remaining elevated at 56,140.2 in December. This persistent January 2026 and increased further to 49,754.0 by March, The transi�on from stabiliza�on in 2025 to synchronized escala�on in 2026 underscores that 2025 re ected divergence—energy prices declining while indicates that while structural oversupply was exerting
infla�onary pressures, weakening growth prospects, and intensifying the broader environment of
However, this structurally bearish outlook was disrupted by acute geopoli�cal tensions affec�ng key
mari�me energy routes, par�cularly chokepoints such as the Strait of Hormuz, which handles a
rise re ected increasing uncertainty in global economic indicating sustained policy instability amid rising geopoli�cal risk has become the dominant force shaping global commodity dynamics, reinforcing metal prices steadily increased—2026 marks a downward pressure on prices, the market had become
structural global economic uncertainty.
significant share of global LNG trade. These disrup�ons introduced shipping risk premiums, cargo
diversions, and short-term supply bo�lenecks, while LNG’s inherently low short run supply elas�city
governance, trade regulations, monetary policy geopolitical tensions. infla�onary pressures, weakening growth prospects, and intensifying the broader environment of synchronized escalation phase, where both indices remain highly vulnerable to geopolitical shocks, which temporarily

amplified the impact of these shocks. As a result, despite underlying oversupply condi�ons, the Asia
coordination, and macroeconomic management. structural global economic uncertainty. overrode fundamentals and triggered extreme volatility
LNG market experienced a sharp nonlinear price spike in March 2026, rising by 93.58 percent in a single
Similarly, the Geopolitical Risk Index rose from 167.80 in elevated under the in uence of geopolitical fragmentation through panic buying, reallocation of cargoes to higher
month. This indicates that while structural oversupply was exer�ng downward pressure on prices, the
market had become highly vulnerable to geopoli�cal shocks, which temporarily overrode fundamentals
January 2026 to 297.27 by March, marking one of the most and supply chain disruptions. This convergence highlights a paying markets, and supply chain disruptions.
and triggered extreme vola�lity through panic buying, realloca�on of cargoes to higher paying markets,
pronounced increases in the dataset. This increase re ects critical structural shift: commodity markets are no longer and supply chain disrup�ons.
intensifying geopolitical con ict, disruptions in key independently driven by supply and demand fundamentals Figure 6: Asia LNG Prices- Monthly (USD per Million Mertic British Thermal
maritime supply routes such as the Strait of Hormuz, and but are increasingly shaped by interconnected geopolitical 25.00 Unit) 100.00
growing concerns over prolonged regional instability, all of and nancial risk factors. 20.00 14.13 14.72 20.81 80.00
which increasingly in uenced market behavior. Overall, the evidence con rms that global energy and metal 15.00 13.12 11.57 11.68 12.96 12.26 11.52 11.28 10.84 11.07 9.91 10.44 10.75 60.00
40.00
10.00
20.00
The combined rise in oil price uncertainty, policy markets have entered a high volatility regime characterized 5.00 0.00
0.00
-20.00
uncertainty, and geopolitical risk suggests that the 2026 by persistent external shocks, elevated price levels, and
commodity shock extended beyond physical supply reduced predictability. The transition from stabilization in Asia LNG Prices % change
constraints and was also shaped by broader systemic 2025 to synchronized escalation in 2026 underscores that
Source: Macrotrends
uncertainty linked to geopolitical fragmentation and policy geopolitical risk has become the dominant force shaping Source: Macrotrends
Source: World Uncertainty Index
unpredictability.

ICMA’s Chartered Management Accountant, Mar-Apr 2026 64