The storm arrived earlier than anticipated. The conflict with Iran has laid bare the fragility of global commodity supply chains, perhaps more clearly than even the pandemic - argues Paul Chapman, HC Group's Managing Partner.
This article was originally published as part of HC Group's Q1 Market Review 2026. Access the full magazine here to read Paul's editorial - and more.
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Three Key Themes
These trends are best encapsulated as structural long-term volatility wrought by digitisation, decarbonisation and deglobalisation. And - though it is said quietly - it is of course good news for some of those Privileged Few people and platforms that solve for commodities in time, form and space.
Operating in an Era of Structural Volatility
Digitisation in this context has meant the speed at which information is produced, digested and acted upon - often absent a human intermediary. This incredible volatility requires platforms and people capable of operating in real-time - from finance to risk and commercial decision making. Platforms leading are laser-focused on centralising data (from proprietary and external sources) and information for decision making and reporting. We are no longer in the genteel world of supply and demand and end-of-day profit-and-loss reporting.
As the supply-side shock roars around the globe, it brings into stark relief some of the trends in our sector that have been with us for a while.
Decarbonisation is back on the urgent and important agenda for much of the non-hydrocarbon producing world. Green credentials cast aside - energy security is the watch-word. The more energy you can make and store locally, the better. At the same time, using my volatility lens, which technologies can stand up to a (very) high commodity price environment? Surely some alternative fuels and carbon capture will have some explaining to do. Either way it’s volatility – whether volatile policies, economics or optics.
Finally, deglobalisation is of course, tragically, the most prominent of the triumvirate. The peak of globalisation and the free flow of capital and people in a laissez-faire economic global order is firmly in the rear view mirror. Commodity markets only function in that framework. At the time of writing, governments are, or are close to, trading commodity futures. Export bans are proliferating and as for companies - governments are picking winners (and losers).
This incredible volatility requires platforms and people capable of operating in real-time.
Impacts for Talent
The Privileged Few – platforms and people – who have the knowledge and capacity to solve problems and capture opportunities will do well (performance dependent). The rest of us can only hope that the free market does what it does - and is allowed to do so. And finally, our thoughts are with our colleagues and connections in the Middle East.