Commodity trade faces geopolitical turbulence, Willis reports

LONDON, Oct. 16, 2025 (GLOBE NEWSWIRE) -- Commodity traders are facing renewed geopolitical risks as military conflicts proliferate, tariffs increase, and global supply chains come under pressure, although these challenges could drive volatility-driven profits for some players, according to a new report from by Willis, a WTW business (NASDAQ: WTW), Managing the new economic risks in commodity trading.

Recent market volatility in response to US tariff threats against China highlight the report’s central question: whether commodity giants are prepared to navigate unpredictable deglobalization pressures. To explore this, Willis and Oxford Analytica consulted an international panel of senior external-affairs and risk leaders, producing a global risk radar and risk-by-risk synthesis of how leading global commodity traders view these challenges.

The top risks that emerged from the report were:

• Tariffs: Tariffs emerge as the biggest economic threat to commodity traders, reshaping trade flows, freezing decision-making and injecting unprecedented policy uncertainty.
• China economic risk: China is still the largest buyer in most commodity sectors. Slowing growth, deflation risks and the fading of unexpected tariff-driven stimulus could affect balance sheets, making close monitoring of the economy essential.
• Complications of a changing climate: Climate change is reshaping commodity markets, altering seasonal fuel demand, increasing pesticide use and straining river-based logistics.
• Ukraine escalation: Geopolitical tensions around military conflicts continue to impact commodity markets with the threat of renewed Black Sea trade disruptions, Russian grey zone escalation and broader militarisation raising fears of supply shocks.
• Maritime disruption: Maritime trade is facing rising disruption as drone-enabled attacks, grey zone tactics and weakening global security guarantees make sea lanes riskier. This drives up costs, the rerouting of ships and threatening the flow of global commodities.
  

The report also examines risks that are flying under the radar but could become top concerns tomorrow. One of these is the evolution of European sustainability regulation and policy, which have in the past shaped how the global market operates, and the ability of authorities to balance the need for reliable, affordable imports with concerns such as data privacy and climate impact. Another risk mentioned is potential turmoil in the global bond market, following decades of extraordinary stimulus ending in a sudden stop in order to combat surging post-pandemic inflation. While few wide-ranging consequences have been observed so far in advanced economies, some concerns arise from isolated examples that could breed larger problems.

Evan Freely, global head of Willis credit risk solutions said: “The world has entered a more protectionist era in which many governments and businesses are moving to onshore production of goods. However, trade remains as vital as ever, especially with commodities that are simply not present, or very difficult to produce, in many geographies. The right risk management solutions are a vital enabler in the commodity trading sector to prevent shortages and supply chain issues and protect operations. We hope the findings in our report are valuable for those active in this space and we thank our contributors for sharing such rich first-hand insight and experiences.”

The complete report can be downloaded here.

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