Copper to Benefit as Geopolitical Uncertainty in the Middle East Strengthens Clean Energy Initiatives

After President Trump declared that peace talks had broken down with Iran, the two nations once again exchanged strikes, signaling a return of a conflict that’s had a profound impact on energy prices throughout the world. 

The news saw crude oil prices soar, with August WTI crude oil (CLQ26) closing 7.41% higher 24 hours on from the breakdown of talks last Tuesday, while August RBOB (RBQ26) rallied 6.62%. 

Uncertainty in the Middle East is having a significant impact on a wide range of commodity markets, with metals appearing to benefit from growing clean energy transition initiatives as more nations seek out alternative sources of power. 

One of the biggest beneficiaries of an accelerating shift towards sustainable energy would be copper, a highly conductive and flexible metal that can be used for a variety of purposes, including supporting solar power and upgrading electrical grids. 

Evidence of copper’s growing use cases has been made clear in the recent performance of ETFs tracking the metal’s price. 

The WisdomTree Copper (COPB.L) ETF, which is listed on the London Stock Exchange, has rallied 11.1% over the past 12 months alone, highlighting the growing reverence for the metal among investors. 

Driving the Clean Energy Transition

The war in the Middle East has had a significant impact on the price of energy because of the closure of the Strait of Hormuz, a busy waterway that typically sees around 20% of the world’s oil flow on its way to international destinations. 

Much like the impact of Russia’s invasion of Ukraine in 2022, the disruption to the supply of oil has created an energy shock that’s seen not only the price of fossil fuels increase but also the price of renewables due to rising demand across the board. 

There’s already been a considerable trend among Asian and African countries speeding up their adoption of solar, batteries, and electric vehicles in a bid to lower their dependence on imported natural gas and oil, and the latest escalation in Iran is likely to only strengthen these initiatives. 

As tensions between the US and Iran boiled over in March, Chinese exports of solar panels soared more than 80% compared to last year. Additionally, China exported more than 2 million electric passenger vehicles between January and May, with almost half occurring in April and May alone. 

Given that renewable energy plants require on average eight to 12 times more copper than fossil fuel forms of energy generation, while electric vehicles consume three to four times more copper than an internal combustion engine, these emerging renewable trends are likely to significantly impact the supply of the metal. 

Demand Could Harm Growth

Copper demand is growing, particularly at a time when the artificial intelligence boom is creating unprecedented power demand in order to build the data centers designed to support the technology. 

US data center power demand is expected to more than double from 31 GW in 2025 to 66 GW in 2027, which will only accelerate copper use cases in the coming months. 

However, current prices depend on AI fulfilling its potential, which is by no means guaranteed, according to some analysts who believe that we’re in the midst of a growing tech bubble on Wall Street. 

“It’s just as easy to see why some investors are perhaps nervous, what with small patches of weaker economic data, US-China trade tensions, and the ongoing threat of fresh tariffs,” noted a Wealthify explainer on the AI bubble. 

“Coupled with AI-based spending and valuations at record levels, concerns naturally lead to this trend being seen as a potential case of short-term overheating.”

There’s also the threat of weakening short-term demand. Although copper prices have repeatedly hit record highs in 2026, the outbreak of war in Iran saw demand expectations for industrial commodities fall due to widespread risk-off sentiment and fears of slowing economic growth. 

J.P. Morgan Global Research analysts have projected copper prices to fall to $11,100-$11,200/mt if bearish macro scenarios play out as a direct consequence of the ongoing geopolitical uncertainty and the higher energy prices they create. 

What’s Next for Copper?

Copper futures have remained highly volatile in 2026 due to the metal’s susceptibility to geopolitical pressures and their wider impact. 

However, copper’s key role in the energy transition will help to uncover more long-term functionality, which will help to drive growth among investors ready to buy and hold with the future in mind. 

While traders are likely to encounter plenty more price fluctuations, a fall below $11,500 could be a great entry point for investors looking for long-term holds to add to a diversified portfolio.