Aluminum hits four year high as Gulf war disrupts global supply

Friday 13 March 2026 - 14:07

By: Dakir Madiha

Aluminum hits four year high as Gulf war disrupts global supply

Aluminum prices climbed to their highest level in nearly four years as the war in the Middle East disrupted shipments from the Persian Gulf, one of the world’s most important production hubs for the lightweight metal.

Three month aluminum futures on the London Metal Exchange settled at $3,516.50 per metric ton on Wednesday, the highest level since March 2022, according to Bloomberg. Prices have surged since the U.S. and Israeli military operation against Iran effectively closed the Strait of Hormuz to commercial shipping.

The waterway is a key export route for Gulf producers, and its closure has isolated a region responsible for roughly 9 percent of global aluminum output.

The disruption has forced several major smelters to halt or scale back operations. Aluminum Bahrain, known as Alba and one of the world’s largest aluminum producers, declared force majeure on supply contracts on March 4 after shipments through the Strait of Hormuz became impossible.

A company spokesperson told Reuters that production at the facility continues, but exports cannot leave the site because shipping routes remain blocked.

In Qatar, the Qatalum smelter began a controlled shutdown on March 3 after QatarEnergy suspended gas supplies following Iranian drone strikes on energy infrastructure in Ras Laffan and Mesaieed Industrial City. Norsk Hydro, Qatalum’s joint venture partner, said the plant will operate at about 60 percent capacity after QatarEnergy confirmed it would maintain reduced gas deliveries.

The supply shock threatens aluminum markets far beyond the Gulf region. Members of the Gulf Cooperation Council produced about 6.16 million tons of primary aluminum in 2025, representing roughly 8.35 percent of global supply, according to the International Aluminium Institute.

More than 5 million tons of aluminum passed through the Strait of Hormuz last year, supplying around 70 countries.

The United States is among the most exposed consumers. Gulf exports accounted for about 21 percent of total U.S. primary aluminum imports in 2025, according to S&P Global data based on U.S. customs records.

Europe faces similar vulnerabilities. Roughly 21 percent of the region’s primary aluminum supply comes from the Middle East, a dependence that has increased since European buyers reduced purchases of Russian metal after the war in Ukraine.

Analysts warn that the tight market could push prices even higher. Global inventories remain limited, with London Metal Exchange warehouse stocks totaling about 465,550 tons at the start of March, and metal of Russian origin accounting for around 60 percent of those volumes.

Goldman Sachs estimates aluminum could reach $3,600 per ton if Gulf production is disrupted for a month. ING commodity strategist Ewa Manthey said prices could even surpass $4,000 per ton given the concentration of export focused smelters in the region.

The crisis is affecting both ends of the supply chain. Export restrictions from the Gulf coincide with constraints on imports of raw materials such as alumina into the region, placing additional pressure on smelting operations already dealing with logistical disruptions.