Natasha Kaneva, JP Morgan's Global Head of Commodities Research, stated in a recent interview during the bank's 22nd Global China Summit that the Strait of Hormuz closure is driving global inflation, interest rates, and commodity pricing. She forecasts oil prices may remain in triple digits through year-end 2026 even if the Strait reopens in June, while gold could reach $6000 per ounce if real rates decline and central banks resume purchases. The comments come as Kevin Warsh formally assumed the Federal Reserve Chair role on May 22, with the Fed maintaining its hawkish stance amid elevated energy prices.
Kaneva attributed current market conditions to the Strait's disruption of approximately 20 million barrels per day of crude oil and refined products—about 25% of global seaborne petroleum trade—according to the International Energy Agency's February 2026 briefing. Alternative land-based pipeline capacity stands at only 3.5 to 5.5 million barrels per day, available solely to Saudi Arabia and the UAE. JP Morgan has raised its 2026 global inflation forecast by 1 percentage point and lowered GDP growth projections by 23 basis points in response, though Kaneva noted recession risks remain limited due to resilient U.S. and Chinese economic performance.
Federal Reserve Policy Stance
Markets currently price in approximately 70% probability of one Fed rate hike in 2026, with another expected in 2027, according to Kaneva. She emphasized that Chair Warsh has repeatedly stated policy decisions will depend on market data, with President Trump publicly expressing confidence in Warsh's data-driven approach. The Fed's April statement cited "elevated inflation, in part due to recent increases in global energy prices" and noted Middle East developments create "considerable uncertainty" for the economic outlook. Kaneva characterized inflation as exhibiting "extreme stickiness" under high energy prices, with impacts concentrated in inflation metrics rather than growth indicators.
Oil Price Projections
Kaneva outlined two scenarios based on Strait reopening timelines. In the base case assuming June reopening, oil prices would stay above $100 per barrel through end-2026, then decline to approximately $64 per barrel by end-2027 after Gulf states restore full production and rebuild inventories. If reopening delays until July or August, prices could reach $120 to $140 per barrel. She noted the current supply shock exceeds the 1956 Suez Canal crisis impact of approximately 10%, with refined products (gasoline, diesel, jet fuel, naphtha) experiencing the most severe shortages. As of May 26, WTI crude futures for July delivery settled at $93.89 per barrel, with Brent crude at $99.58 per barrel.
Gold Market Dynamics
Kaneva identified real interest rates and central bank purchases as the two primary factors influencing gold prices. She explained that the historical inverse correlation between gold and real rates—where each 25 basis point rate change corresponded to an $80 per ounce gold price move—broke down in 2022 when central bank purchases surged from 450 tons (2021) to 1080 tons (2022). Annual purchases remained elevated at 1051 tons (2023) and 1092 tons (2024) before declining to 863 tons in 2025, still above pre-2022 levels. This buying drove gold from approximately $1700 per ounce to above $4000 per ounce.
Following the U.S.-Iran conflict, some central banks—particularly in the Middle East—have reversed course, selling gold to maintain liquidity amid constrained oil export revenues. Kaneva estimated current annualized central bank purchases at 600 to 650 tons, below the pre-conflict forecast of 800 to 850 tons. Real rates have risen 50 basis points since early 2026 due to energy-driven inflation concerns, re-establishing the inverse gold-rate relationship. In the base case with June Strait reopening, Kaneva projects gold reaching $6000 per ounce by end-2026 and $6300 by end-2027 as real rates decline and central banks resume purchases. If the Strait remains closed, she expects continued oil price increases to push gold lower.
Copper Supply Constraints
Kaneva reported 2025 marks the first year in her career with no new copper mine projects appearing in public filings, despite market prices of approximately $13000 per ton versus production costs near $7000 per ton. She stated new supply additions are not expected until 2027. Demand continues rising from automotive electrification, AI infrastructure, and data center construction. While 2022-2023 price increases stemmed primarily from supply shortages, current conditions reflect both macro demand growth and severe supply deficits. Kaneva forecasts copper at $12500 per ton by end-2026, with 2027 average prices around $11625 per ton.
