Geopolitical tensions, trade policies, and a slowing economy are driving significant volatility across gold, oil, and other commodities.

So what's the outlook from here? I'm Allison Nathan, and this is Goldman Sachs Exchanges.

For today's episode, I'm speaking with my colleague in Goldman Sachs Research, Dan Strohven, co-head of global commodities research and head of oil research, to talk about

how recent events, notably the Middle East conflict and evolving tariff policies, are affecting

the broader commodity and economic landscape. Dan, welcome back to the program. Thanks, Elsa.

So let's start with oil. I think the obvious place to start. Oil prices have been very volatile amid these recent developments in the Middle East.

But I think what's most striking to me is how quickly they actually retreated from the recent highs.

And they're still at lower levels.

And I think many people would have expected, given the recent developments.

So why is this?

Yeah, absolutely. So we estimate that the geopolitical resprinium oil

spiked to over $15 per barrel on Sunday night just a week ago,

and then 24 hour later, which was just worth only a couple of dollars per barrel.

Based on the fact that oil prices were nearly back to pre-escalation levels,

and also if you look at options markets,

if you look at option markets and look at the probability of large supply disruptions,

it's pretty low as estimated by options markets, below 4% or so. And the question is, why is that?

I think the first reason is that oil traders have now experienced

several episodes with major

geopolitical shocks, but actually no

disruptions to oil flows, with

barrels still still flowing. I think

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