Merritt Dawsley’s Commodity Crossroads: Global Resources Markets in 2025

By 2025, the world’s commodity markets feel strangely out of sync. Oil has retreated from its highs as supply keeps coming online, yet metals tied to AI, electrification and data centers remain in focus. Official projections from institutions such as the World Bank now anticipate another two years of broad-based declines in commodity indices—roughly a 7% drop in both 2025 and 2026—at the same time that the energy transition and persistent geopolitical risk keep volatility elevated across energy, metals and agriculture.

It is this tension that interests market strategist Merritt Dawsley. Rather than treating commodities as a series of isolated trades, he approaches the 2025 resources cycle as a connected system shaped by macro growth, supply waves and decarbonization policy.

The Strategist Behind the Framework

Dawsley’s work sits at the intersection of academic training and market practice. With a background in finance, economics and investment management from leading U.S. business schools, he later added professional qualifications that cover both bottom-up valuation and the behavioral dynamics of markets. Over the years he has appeared in mainstream financial media to discuss macro cycles, crisis mechanics and cross-asset positioning.

Early in his career, he became known for recognizing inflection points in emerging assets—among them a research-driven allocation to Bitcoin when many traditional investors were still dismissive of digital currencies. Equally important was his emphasis on risk discipline: probability distributions, stress testing and predefined exit rules, rather than a reliance on a single “hero trade.”

That same mindset now guides his work on the 2025 commodity landscape, which he sees as a three-way collision between:

Slowing global growth and disinflation,
A strong supply response in oil and several industrial commodities,
Long-dated demand stemming from the energy transition and digitalization.

Three Tensions Defining the 2025 Commodity Landscape

1. Slower Growth, Softer Inflation

Recent IMF World Economic Outlook updates describe an expansion that continues but at a more fragile pace, with risks skewed to the downside and policy uncertainty still high. World Bank analysts note that primary commodity prices only inched higher from late 2024 into early 2025, with strength concentrated in pockets such as natural gas and precious metals.

For Dawsley, this backdrop implies that:

Demand for many bulk commodities is stable rather than booming.
The 2025 price cycle is being driven less by runaway demand and more by policy shifts, inventory management and producer discipline.

2. A Growing Wave of Oil and Energy Supply

On the energy side, multiple official outlooks now suggest that oil supply capacity is on track to grow faster than demand through the remainder of the decade. The IEA’s oil market work, for example, projects non-OPEC+ production—led by the United States and other producers in the Americas—pushing global capacity comfortably above expected demand by 2030.

Short-horizon projections from the U.S. EIA and J.P. Morgan Research both have Brent crude averaging below USD 70 per barrel in 2025, reflecting robust non-OPEC+ output, the gradual unwinding of OPEC+ cuts and moderate demand growth. The IEA has already highlighted how early-2025 price declines have prompted some executives to reconsider upstream spending plans.

Dawsley characterizes the resulting regime in oil as a “soft floor, soft ceiling” environment:

Slower demand growth limits the upside.
Rising spare capacity and political pressure in some countries to keep fuel prices contained reduce the likelihood of prolonged spikes.
Yet geopolitical or policy shocks can still generate sharp rallies from relatively depressed starting points.

3. Energy Transition and the Metals Behind It

At the same time, the energy transition is reshaping the long-run demand profile for both fuels and minerals. The IEA’s World Energy Outlook publications argue that clean technologies are likely to cover essentially all incremental energy demand through 2035, with aggregate demand for coal, oil and gas peaking before 2030.

This has direct implications for critical minerals and metals such as copper, lithium and rare earths:

Structural demand is anchored in electric vehicles, power grids, batteries and the data centers supporting AI and cloud computing.
Market attention is shifting toward supply security, recycling and technological substitution—not just month-to-month price action.

In Dawsley’s view, 2025 is best understood as the overlap of two different cycles:

A cyclical cooling in traditional energy and bulk commodities, and
A structural uptrend in materials leveraged to decarbonization and digital infrastructure.

How Dawsley Organizes the Commodity Universe

To avoid getting lost in ticker-by-ticker noise, Dawsley groups the 2025 commodity complex into three functional clusters: energy, metals and agriculture. Each responds differently to growth, policy and transition dynamics.

Energy: Oil, Gas and Refined Products

Oil remains the anchor of the energy complex, but the cluster also includes natural gas and refined products:

IEA data show oil demand growth slowing sharply in 2024, with less than 1% growth after a much stronger 2023 rebound as the post-pandemic mobility surge faded and EV penetration increased.
World Bank and other projections point to lower average energy prices in 2025 and 2026, consistent with a broader decline in commodity price indices.

Within this setting, Dawsley pays close attention to:

Forward curve shape (contango vs. backwardation) as a signal of storage incentives and inventory behavior,
Supply reactions from U.S. shale and other key exporters as prices test breakeven levels,
Policy interventions in major consuming countries, from price caps to subsidies, that can dampen or amplify market moves.

Metals: Industrial Workhorses and Critical Inputs

The metals cluster spans both traditional industrial metals and newer “transition” materials:

Industrial metals face headwinds from slower manufacturing growth and trade uncertainty, but still benefit from infrastructure upgrades and grid investment.
Critical minerals may show choppy short-term pricing, yet their long-run narratives are linked to EV fleets, renewable power and AI-driven data centers—all of which are metal-intensive.

In his 2025 work on metals, Dawsley emphasizes three themes:

The geographic concentration of mining and processing capacity,
The use of export controls and industrial policy to shape supply chains,
The potential for substitution and technological shifts to redraw demand profiles.

Agriculture and Food: Where Idiosyncratic Risk Lives

Agricultural markets, in Dawsley’s taxonomy, are where idiosyncratic shocks matter most:

Weather events and climate patterns can quickly disrupt supply.
Tariffs, quotas and export bans can alter trade flows overnight.
Biofuel policies increasingly bind crop markets to energy prices.

World Bank analysis notes that some agricultural and beverage prices have contributed to small overall commodity price gains in early 2025, even as aggregate indices drift lower. For Dawsley, this makes agriculture the part of the complex where local disruptions can still generate sharp price spikes, even in a generally softer global environment.

Inside the “Commodity Crossroads” Framework

To keep these moving parts coherent, Dawsley uses what he calls a Commodity Crossroads Framework for the 2025 global resources cycle. It rests on three axes:

Price vs. Cost Curve – Where spot and forward prices sit relative to production costs and investment thresholds.
Cycle Position – Whether a given commodity is in expansion, slowdown or transition.
Policy and Transition Overlay – How climate, industrial and security policies bend the usual supply-demand dynamics.

1. Price vs. Cost Curve

The first question he asks in any commodity market is straightforward:

Are prices high enough to invite new capital, or low enough to choke off supply?

In 2025, his broad assessment is:

Oil and several industrial commodities trade closer to the middle or lower parts of their cost curves, squeezing high-cost producers and discouraging aggressive capex.
Critical minerals show a more uneven picture: some assets still enjoy high margins, while others already look vulnerable as new projects come online.

2. Cycle Position: Late, Early or in Transition?

Dawsley then assigns each commodity to a cycle “bucket”:

Many fossil fuels look late-cycle or early-downturn, with supply finally catching up to the post-pandemic demand rebound and spare capacity building.
Key energy-transition metals resemble mid-cycle assets: structural demand is rising, but cyclical headwinds from global growth and industrial production are real.

This classification helps him judge whether a given price move is more likely to extend an existing trend or revert to a prior range.

3. The Policy and Transition Overlay

Finally, he overlays policy and transition forces on top of economics:

Climate commitments, carbon pricing and subsidies alter long-run fossil fuel economics.
Industrial policy in major economies targets control over critical minerals, batteries and clean-energy supply chains, encouraging stockpiling, export controls and strategic inventories.

In Dawsley’s view, this overlay means that classic supply-demand charts are no longer enough. Any analysis of the 2025 commodity markets must explicitly account for security considerations, climate goals and the technology race.

Three Possible Paths for the 2025–2026 Resources Cycle

Using the Commodity Crossroads Framework, Dawsley sketches three broad scenarios for 2025–2026 rather than a single forecast.

Scenario 1: “Orderly Descent” – His Base Case

In the Orderly Descent scenario:

Global growth remains modest and uneven, but no major new shock emerges.
Commodity indices decline roughly in line with World Bank projections, with mid-single-digit drops in both 2025 and 2026.
Oil and gas stay well supplied; prices move within the ranges suggested by EIA and major bank forecasts, with volatility lower than in the immediate post-pandemic years.

For investors, this world still offers dispersion between sectors—energy vs. metals vs. agriculture—enough to reward careful differentiation and security selection.

Scenario 2: “Supply Wave and Overshoot” – Downside for Prices

The Supply Wave and Overshoot scenario pushes prices lower:

Non-OPEC+ producers raise output more aggressively than expected, and OPEC+ adjusts only slowly.
Efficiency gains and policy changes sap incremental demand for some fuels faster than consensus assumes.

In this case, energy prices could undershoot current base-case forecasts, echoing some of the more bearish views for the late 2020s and pulling broader commodity indices down with them.

Scenario 3: “Policy and Climate Shock” – Upside Risk

The Policy and Climate Shock scenario runs in the opposite direction:

Severe weather, geopolitical conflict or logistical disruptions constrain supply in energy or agriculture.
Sudden policy shifts—sanctions, export bans on key minerals, new controls on strategic goods—disrupt trade flows and inventory behavior.

Here, the 2025–2026 commodity markets could experience sharp but temporary price spikes even if the longer-term path remains one of gradual normalization. Dawsley treats this as a lower-probability case but an essential input into risk planning, particularly for energy, metals and food.

What This View Implies for Risk Management

Dawsley is explicit that his work is not meant to be a list of trade tips. Instead, he distills a set of principles for institutions and risk managers navigating the 2025 resources cycle:

Think in systems, not silos. Energy, metals and agriculture are connected via costs, policy and technology. Analyzing one in isolation can give a false sense of security.
Use regimes and ranges, not single price targets. For oil, gas and key metals, he prefers to define price bands implied by supply, demand and policy—and update them as new information arrives.
Separate structural forces from cyclical noise. The energy transition is a multi-decade structural theme; a soft patch in manufacturing is cyclical. Mixing the two can lead to poor timing decisions.
Build resilience to shocks, not just to the baseline. Even if the base case resembles an orderly drift lower in prices, risk systems should be engineered to withstand the overshoot and shock scenarios outlined above.