Commodity Price and Supply Pressures Test Natural Resources Resilience

Commodity Price and Supply Pressures Test Natural Resources Resilience
November 9, 2026 9 mins

Commodity Price and Supply Pressures Test Natural Resources Resilience

Commodity Price and Supply Pressures Test Natural Resources Resilience

Commodity volatility is no longer solely a pricing or procurement concern. Geopolitical disruption, concentrated supply, infrastructure constraints and changing trade rules are affecting project delivery, liquidity, investment and growth across the natural resources sector.

Key Takeaways
  1. A price or supply shock can spread quickly from procurement and logistics to production, project economics, working capital, counterparty exposure and financing.
  2. Strong prices may improve earnings for some producers while weakening investment incentives elsewhere, creating future scarcity and complicating capital allocation.
  3. Leading organizations combine supply chain visibility, scenario analysis, commercial flexibility, liquidity planning and carefully structured risk financing.

Natural resources businesses have long managed commodity cycles. What feels different today is the number of forces acting simultaneously and the speed at which disruption in one market can affect another.

Geopolitical tensions, export controls, tariffs, severe weather, labor constraints and infrastructure bottlenecks are reshaping the movement and cost of energy, metals, minerals and agricultural products.

At the same time, the energy transition, electrification, artificial intelligence and data center development are increasing demand for power, grids, storage and the materials needed to build them.

Together these pressures make commodity price risk inseparable from material availability and business continuity. Aon’s 2025 Global Risk Management Survey ranks commodity price risk and material scarcity sixth among current global risks and fourth by 2028. Within natural resources, the risk ranks third today and is expected to rank first by 2028.

This trajectory matters because commodity pressures can amplify other leading concerns, including supply chain failure, geopolitical volatility, business interruption and liquidity constraints.

Quote icon

Many of these risks ultimately lead to business interruption. Commodity price risk, supply chain disruption and geopolitical uncertainty may appear distinct, but their impact is often felt through the same operational consequences.

Paul Pryor
Global Industry Specialty Leader, Mining

Market Impacts of Ongoing Commodity Pressures

  • 1/3

    Aluminum, copper and tin pricing rose by roughly one-third between January 2025 and April 2026.

  • 3.4x

    Demand for lithium is expected to triple by 2040. Pricing has already more than doubled amid strong storage demand and constrained supply.

  • 90%

    Demand growth for nickel, graphite and rare earths is expected to increase by 90% by 2040, up from 50% in 2025.

  • 9%

    Critical mineral investment declined 9% in 2025, with capital spending by battery mineral companies down by more than 20%.

    Source: IEA Global Critical Minerals Outlook 2026

Financial Impacts Often Emerge Quickly

Market volatility complicates long-term planning. Producers, developers and buyers must make long-duration decisions while commodity prices, financing costs, regulation and technology move at different speeds. Temporary oversupply can depress prices and delay projects even when the long-term demand case remains strong.

Conversely, a sharp price increase may strengthen producer earnings while raising costs elsewhere in the value chain.

The world’s 40 largest mining companies increased revenue by 3.3% to $909 billion in 2025, while EBITDA rose 23% to $248 billion. Higher prices for gold, silver, platinum group metals and copper contributed to these gains. The results demonstrate both the opportunity created by favorable markets and how quickly commodity movements can alter cash generation, investment capacity and shareholder expectations.1

When Pricing Becomes an Operational and Financial Problem

Case Study

When Pricing Becomes an Operational and Financial Problem

Commodity volatility rarely remains confined to the traded price. Its effects extend to projects, physical supply chains, contractual commitments and balance sheets.
Long-duration infrastructure and energy projects are particularly exposed because their economics can change after investment decisions. Equipment, raw materials, logistics, labor, foreign exchange and interest rates may all move while expected project revenue remains fixed. Japan’s offshore wind market illustrates this risk. In 2025, Mitsubishi Corporation withdrew from three projects awarded through Japan’s first offshore wind auction. The company cited tight supply chains, inflation, exchange rate movements and rising interest rates. Construction costs had reportedly more than doubled from the assumptions used when the projects were bid in 2021. The decision affected approximately 1.7 gigawatts of planned capacity.2

The implications extend beyond offshore wind. Fixed-price or inflexible commercial arrangements can become fragile when delivery takes several years and cost assumptions cannot adjust. Permitting delays, grid connection queues and constrained manufacturing capacity can compound the exposure by extending the period during which costs and financing remain at risk.

“Two years ago, much of this discussion would have centered on sustainability,” says Guido Benz, CEO, Global Renewable Energy. “Today, energy security and resilience have become equally important drivers of investment decisions.”

Logistics disruption can produce similar consequences. A rerouted vessel does not simply arrive later. Additional days at sea increase fuel and labor costs, working capital requirements, financing periods and contractual commitments.

“If a shipping route suddenly adds another 14 days to the journey, you’re not just extending transit time,” says Barrie Watson, Growth and Innovation Leader, Credit Solutions, United Kingdom. “You’re extending working capital, financing, fuel, labor and contractual commitments across the entire supply chain. The costs compound very quickly.”

The exposure can also extend to counterparty credit. A supplier failure may force a buyer to replace a contract in a higher-priced market. A customer failure can leave a producer or trader holding volume that must be resold after prices have moved against it. In both cases, the loss reflects not only unpaid invoices, but also the cost of replacing the economic position.

“What catches people out is how quickly these exposures can build,” adds Watson. “You can have major multinationals carrying billions of dollars of mark-to-market exposure across their portfolios, and once markets start moving those numbers can change very quickly. That’s when counterparty credit risk becomes a board-level issue.”

Collateral requirements can intensify this pressure. Commodity contracts may require cash or bank guarantees when market values move or a counterparty’s credit quality changes. During periods of volatility, margin calls can consume liquidity and bank line capacity precisely when the business needs flexibility to secure supply, replace a counterparty or continue a project.

For boards and finance leaders, this changes the decision frame. Commodity risk is not simply about whether the price of an input rises or the price of an output falls. It is about whether the organization can continue to perform when price, supply, infrastructure, liquidity and contractual risks reinforce one another.

What Resilient Organizations are Doing Differently

Organizations cannot eliminate volatility, but they can improve the quality and speed of their decisions through four actions:

  • Create a Connected View of Exposures

    Many businesses hold extensive procurement, supplier, customer, trading and financial data, but it often sits in separate systems and functions. Connecting that information allows leaders to identify where a shock could enter the value chain, how it might spread and which consequences the balance sheet can absorb.

    “Averting commodity price shocks starts with getting the full picture,” says Gary Lorimer, Global Growth Leader, Credit Solutions. “Get all of the information together, build that into one picture, and then work out what you’re going to buy and what your strategy is moving forward.”

    This requires mapping critical suppliers, customers, routes, infrastructure dependencies and geographic concentrations. It also requires quantifying replacement costs, delivery delays, lost production, counterparty exposure, collateral requirements and liquidity draw under plausible scenarios. The most useful analysis links operational events to cash flow and financing rather than treating each risk in isolation.

  • Build Flexibility into Projects and Commercial Arrangements

    Options include diversified sourcing, alternative transport routes, inventory or storage strategies, long-term supply agreements, portfolio diversification and project sequencing.

    Contract design also matters. Price adjustment mechanisms, indexation, change-in-law provisions and clearer allocation of delay or delivery risk can make agreements more durable when market conditions change.

  • Prioritize Capital with Stable Policy and Infrastructure Support

    Major renewable energy developers are reassessing projects by geography, technology and deliverability. Capital is increasingly moving toward markets with clearer regulation, more credible auction designs and realistic paths through permitting and grid connection. Investment is also shifting toward transmission, interconnection and storage, which can become binding constraints on generation growth.

  • Evaluate Risk Financing Before Warning Signs Become Losses

    Depending on the exposure, the toolkit may include business interruption and project-related insurance, credit insurance, surety, political risk insurance, captives or parametric structures. The objective is not to insure every fluctuation. It is to determine which severe or liquidity-intensive outcomes to transfer, which risks to retain and which exposures to mitigate operationally.

    • Credit insurance can protect against material counterparty default or replacement risk and may also provide confidence to pursue growth. For example, Aon worked with a commodity trader that used insurance to support a challenging counterparty relationship. The arrangement has continued for more than a decade, enabling substantial revenue that the company might otherwise have declined. Its value was not defined by claims. It came from creating capacity to transact while managing a concentrated exposure.
    • Surety can provide another source of collateral without consuming the same bank capacity as cash or guarantees.
    • Political risk insurance may be relevant when mines, licenses, export permissions or prepaid supplies are exposed to government action, currency inconvertibility, political violence or contract frustration.
    • Captives may suit more predictable layers of credit exposure, while parametric structures can be useful where reliable data supports a transparent trigger, particularly for weather-related risks.

    The appropriate structure will differ by business. What matters is testing how each option would respond, including its wording, triggers, claims process and interaction with existing contracts.

Resilience Preserves Strategic Choice

Commodity volatility will remain integral to the natural resources sector. The greater challenge is how it now combines with geopolitical fragmentation, infrastructure constraints, supply concentration, financing pressure and changing demand.

Organizations that treat these forces as separate procurement, treasury or insurance issues may miss how quickly they converge. Those that connect operational and financial data, test credible scenarios and act early have more options. They can redesign contracts, redirect capital, strengthen liquidity, diversify supply and secure risk capacity before markets become restrictive.

“The risk is out there. The question is whether you want to ignore the signs that are already there, or whether you want to really understand the risk,” adds Lorimer.

Learn how your organization can benefit from Aon’s breadth of risk management experience and knowledge across all natural resources industry sectors.

Aon’s Thought Leaders

Guido Benz
CEO of Global Renewable Energy

Gary Lorimer
Global Growth Leader, Credit Solutions

Paul Pryor
Global Industry Specialty Leader, Mining

Barrie Watson
Growth and Innovation Leader, Credit Solutions, United Kingdom

1 Mine 2026: Ambition to action, PwC
2 Mitsubishi Decides to Exit Three Offshore Wind Projects in Japan, Offshore Wind

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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