Iran War Sparks Aluminium Supply Crisis: Prices Set to Skyrocket!

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Iran War Triggers Aluminium Supply Crisis in the Gulf

Emirates Global Aluminium, the largest aluminium producer in the Middle East, has temporarily stopped fulfilling some of its supply agreements.

Following an attack on March 28th where Iranian missiles and drones damaged its primary facility in Al Taweelah, Bloomberg is reporting this development.

Gulf Aluminium Crisis Deepens

Force majeure is a legal concept – originally French for “superior force” – that covers unexpected, extraordinary events outside of anyone’s control, like wars, natural disasters, or pandemics. These events can excuse a party from fulfilling their obligations under a contract.

As a crypto investor, I’ve been seeing ‘force majeure’ pop up more and more. Basically, it’s a company telling everyone that something totally unexpected and unavoidable happened – a real disaster – and because of it, they can’t fulfill their promises without getting in legal trouble. It’s their way of saying, ‘It’s not our fault, and we’re not responsible for the fallout.’

Bloomberg News reported that some contracts include force majeure clauses, as detailed in documents they reviewed.

Al Taweelah, a massive aluminum smelter in Abu Dhabi’s Khalifa Economic Zone, was damaged in recent attacks. Emirates Global Aluminium (EGA) estimates repairs could take as long as a year.

This incident will likely cause a long-term shutdown of a plant that was expected to produce 1.6 million tonnes of metal in 2025. It appears to be a response to recent US and Israeli strikes on Iranian factories and industrial sites.

I just saw a report that something went seriously wrong with their hardware. Apparently, metal actually built up *inside* the processing equipment during operation, causing major damage. They’re saying it could take up to a year to fix everything, which is a huge setback.

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Earlier today, Iran attacked Emirates Global Aluminium in the Khalifa Economic Zone. It could take as long as a year to fully restore production.

— The Hormuz Letter (@HormuzLetter) April 3, 2026

EGA wasn’t the only company affected. Aluminium Bahrain (Alba) also had to temporarily close parts of its operations in early March. This happened because the closing of the Strait of Hormuz stopped deliveries, and Alba was also directly targeted in the Iranian attack.

In March, Qatar’s Qatalum also had to stop production when QatarEnergy paused its LNG output after attacks on its energy facilities. Overall, aluminium producers in the Gulf region account for roughly 9% of the world’s total primary aluminium production.

Aluminum is a key component in a huge range of products, including airplanes, food containers, and solar panels. Because of this, problems with its supply are affecting many industries, not just the metals market. As Global Markets Investor noted, this has become a broader industrial crisis, going beyond just an energy issue.

Why This Matters Beyond Commodities

Experts at Wood Mackenzie predict the conflict in the Middle East could reduce global aluminium production by 3 to 3.5 million tonnes in 2026. Considering last year’s total production of nearly 74 million tonnes, this represents a significant impact. As a result, aluminium prices on the London Metal Exchange have jumped above $3,500 per tonne, nearing levels not seen in four years.

If problems with regional production continue, Goldman Sachs predicts gold prices could climb to $3,600. Kpler analysts believe further issues could even drive prices up to $4,000.

Aluminum is a critical material for both military and industrial purposes. However, the United States currently relies on the Middle East for about 22% of its aluminum supply. Furthermore, the amount of aluminum stored in warehouses has dropped significantly – around 60% since May – leaving very little reserve to handle any unexpected disruptions.

As a researcher following economic trends, I’m seeing that the current challenges – already including high oil prices, shipping disruptions, and the instability surrounding the Iran conflict – are now being worsened by a squeeze on aluminium supply. This is adding to existing inflationary pressures, and it’s particularly impacting industries like aerospace and automotive, which depend on high-quality aluminium sourced from the Gulf region. Essentially, it’s making production more expensive for them.

Everyone is watching to see if the current ceasefire lasts and if shipping can fully resume through the Strait of Hormuz. The future of these events will significantly impact how large the shortage of aluminum becomes and how much prices increase in the coming months.

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2026-04-11 19:33