Retail traders rush into oil and gold as Middle East tensions rise further

Dubai: The widening Middle East conflict is beginning to reshape global trading patterns, lifting demand for oil and gold while raising concerns about energy supply, shipping disruption and soaring war-risk insurance.

Retail trading activity surged with oil becoming the second most-traded asset in a single session on trading platform Capital.com. Platform data shows active traders rose 49% in one day, trading volumes jumped 73%, and executed trades increased 82% compared with the previous Friday.

The sharp rise in activity reflects how retail investors are tweaking portfolios amid growing uncertainty in global markets. Energy and precious metals drew the most attention as traders reacted to potential supply disruptions and rising volatility.

Oil quickly became one of the most actively traded assets on the platform as geopolitical risks intensified. Retail investors moved rapidly into energy markets as the conflict raised concerns about possible supply disruptions.

Key shifts recorded between Friday and Monday include:

Market sentiment also turned more bullish.

The data suggests traders quickly reassessed their exposure to energy markets as geopolitical risk increased.

Gold trading also surged as investors looked for protection from market volatility. The metal is widely viewed as a safe-haven asset during periods of geopolitical uncertainty.

Between Friday and Monday:

Gold remained the most traded instrument on the platform throughout the week. Investor sentiment also strengthened during the period.

The increase suggests retail investors are positioning for continued volatility in global markets.

Kyle Rodda, senior market analyst at Capital.com, said precious metals have long been popular with retail traders. Demand often rises during periods of geopolitical uncertainty.

“Precious metals, especially gold, are typically a perennial favourite of retail traders,” Rodda said. “However, extraordinary uncertainty regarding global geopolitics, trade and economic policy has only seen interest in them surge, with the crisis in the Middle East stoking that further.”

Rodda said the most dramatic shift in activity has occurred in energy markets as traders react to supply risks.

“The significant shift in activity has been in the energy complex, as traders reassess their exposure to the volatility caused by the conflict in the Middle East,” he said. “The risk of meaningful supply disruptions in the region is driving considerable bullish positioning for crude, though some traders have begun to fade that move following the initial spike.”

The conflict is also disrupting shipping through the Strait of Hormuz, one of the world’s most important energy corridors. The route carries more than 20 million barrels of crude and fuels each day, about one-fifth of global oil consumption, according to Vortexa.

Traffic slowed sharply after Israeli-U.S. strikes on Tehran and Iran’s warning that vessels attempting to pass through the strait could be targeted. Shipping reports indicate at least nine vessels have been damaged since the conflict began.

Around 200 ships are now waiting in waters near major Gulf producers while operators assess the security situation. Some vessels are being rerouted away from the region to reduce exposure to risk.

Insurance costs for ships travelling through the region have risen sharply as risks increase. War-risk premiums in some cases have surged by more than 1,000%, raising the cost of transporting energy cargo.

Stephen Rudman, head of marine for Asia at insurance broker Aon, said insurers reacted quickly to the heightened threat.

“The hull war market has reacted more immediately,” Rudman said. “Additional premiums for vessels transiting high-risk waters are rising sharply and may continue to fluctuate in the short term.”

Analysts at Jefferies estimate potential industry losses from vessels already damaged could reach up to $1.75 billion.

Most tankers are valued between $200 million and $300 million, making them highly exposed to conflict-related risks. Before the conflict, hull war-risk insurance typically cost around 0.25% of vessel value, or about $625,000.

New rates near 3% could raise premiums to roughly $7.5 million per vessel, reflecting the sharp increase in risk.

Insurance brokers say war-risk premiums vary depending on vessel type and exposure to the conflict zone. Current estimates place rates between 1% and 1.5% of vessel value, according to Dylan Mortimer, marine hull UK war leader at insurance broker Marsh.

About 1,000 vessels are currently operating in Gulf waters, with a combined hull value exceeding $25 billion, according to the Lloyd's Market Association.

Shipping companies have also introduced war surcharges ranging from $2,000 to $3,500 per container when port operations are disrupted.

Analysts say supply chains could face additional pressure if ships are forced to reroute around Africa’s Cape of Good Hope, increasing travel times and transportation costs.

Governments are now exploring ways to stabilise maritime traffic and protect global energy supplies.

U.S. President Donald Trump said the U.S. Navy could escort oil tankers through the Strait of Hormuz if necessary. The move aims to ensure the continued flow of energy shipments through the critical waterway.

Trump also directed the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.

Analysts say it remains unclear whether these measures will quickly restore normal shipping activity. Markets are likely to remain sensitive to developments in the region.

 - With inputs from Agencies