Finance and Risk
The Rising Role of Risk in Global Commodity Trading
In today’s increasingly complex global economy, commodity trading no longer hinges solely on price movements and supply-demand fundamentals.
From shifting geopolitics to climate-driven disruptions, risk has become a central pillar of how firms trade, hedge and operate across markets.
Nowhere is this transformation more visible than in the growing demand for specialized risk talent – people who not only understand volatility but can also anticipate and model it across borders, sectors and systems.
What’s driving this shift? Commodity trading has always involved risk, but the scope and scale of that risk are evolving. Across regions, firms are grappling with multi-layered disruptions: from energy transition policies and ESG mandates to political instability and extreme weather. These challenges are not just operational – they’re strategic. As a result, firms are rethinking how they approach risk, and more importantly, who they need to manage it.
Let’s take a closer look at how this is playing out region by region.
North America: Risk Reframed by Energy Dominance and Climate Volatility
In the US, surging LNG exports and shale output have reshaped energy markets, making American production a key influence on global pricing. At the same time, climate-related disruptions – from wildfires to hurricanes – are creating new layers of financial and physical exposure, especially in agriculture and energy.
On the regulatory front, new emissions disclosures and climate risk mandates (like the SEC climate rule) are forcing firms to reassess compliance strategies and exposure reporting. Meanwhile, US-China trade tensions continue to unsettle markets for agricultural commodities and critical minerals – tensions that have only intensified under the current Trump administration.
What this means for talent: The need for professionals with expertise in climate risk, weather analytics, and energy transition modeling is surging. Regulatory risk experts who can navigate complex compliance environments and geopolitical strategists who understand how macro shifts influence trade and hedging are also in high demand.
EMEA: A Risk Landscape in Transition
Europe is at the forefront of the energy transition, but that progress brings challenges of its own. The fallout from the Russia-Ukraine conflict has accelerated the shift to renewables and LNG, while also amplifying exposure to cyber threats and grid reliability issues.
EU policy changes, such as the expansion of the Emissions Trading System (ETS) and the rollout of the Carbon Border Adjustment Mechanism (CBAM), are pushing firms to integrate carbon risk into everyday decision-making.
Across the Middle East, long-standing geopolitical tensions continue to pose risks to critical supply routes. At the same time, the region is investing heavily in hydrogen and other clean energy projects, introducing new kinds of infrastructure and sovereign risk.
What this means for talent: In Europe, there’s growing demand for:
- Carbon market specialists
- ESG compliance experts
- Cross-border policy analysts.
In the Middle East, firms are looking for professionals who can assess physical security and political risk, particularly around high-stakes energy and infrastructure assets.
APAC: A Region Defined by Strategic and Climate Uncertainty
China’s commodity strategy – from stockpiling to price controls – is reshaping regional and global flows. Tensions in the Taiwan Strait and the South China Sea are also putting energy and agriculture shipping lanes under pressure.
Meanwhile, climate risks are hitting hard: monsoon variability is impacting India’s ag sector, hydro shortages are disrupting energy in parts of Southeast Asia, and mining operations in Australia face growing exposure to environmental events.
What this means for talent: There’s rising demand for scenario planners and geopolitical analysts with a focus on China and trade tensions. Risk modelers who can work across digital, FX and derivatives markets – especially in real time – are increasingly vital, along with supply chain experts focused on climate resilience.
Latin America: Risk Is Political, Operational and Environmental
Resource nationalism is on the rise across LATAM, with countries like Bolivia and Chile revisiting ownership and export rules for key minerals like lithium and copper. Climate volatility is also taking a toll – from flooding to droughts – threatening ag output and hydropower reliability.
Add to that a backdrop of political instability in markets like Argentina, Venezuela and Peru, and you have a region where operational and sovereign risk are deeply intertwined.
What this means for talent: Organizations are actively seeking risk professionals with deep local insights, with the following roles becoming increasing critical:
- Operational risk managers
- ESG analysts focused on environmental and community impact
- Economists who can model FX and country-level exposures
Global Politics: The Trump Factor and the Return of Trade Risk
Today’s political climate is a direct driver of risk in commodity markets. Under the current Trump administration, the US has reimposed and expanded tariffs on Chinese goods, reigniting trade tensions and introducing uncertainty across global supply chains – particularly in agriculture, rare earths and clean energy components.
The administration’s protectionist stance and confrontational trade posture are disrupting established routes and raising the cost of cross-border transactions. For traders this means:
- Higher volatility
- Shifting demand patterns
- New layers of exposure to sanctions, export controls and retaliatory tariffs
Markets are also watching closely for further action on tariffs targeting Mexico, the EU and other trading partners – many of which directly affect food, fuel, and critical metals. The unpredictability of policy from Washington is forcing firms to scenario-plan more aggressively and hedge against political risk as a primary market driver.
What this means for talent: Firms are investing in professionals who can track political developments and translate them into market risk quickly and accurately. Geopolitical analysts, legal and compliance specialists with international trade experience, and real-time risk strategists are increasingly being pulled into frontline decision-making.
Political risk is no longer an external factor; it’s embedded in every trade.
The Bottom Line
Global commodity trading is being reshaped by a diverse – and growing – array of risks. From climate and cyber threats to geopolitical realignment and regulatory upheaval, the role of risk is no longer a support function; it’s a strategic driver.
To keep pace, firms are investing in talent that goes beyond traditional risk management. They’re looking for professionals who can connect the dots between weather data and shipping flows, between policy shifts and pricing models.
In a world where every trade carries more complexity, risk has become not just a factor to manage — but a source of competitive edge.
For a conversation about your firm’s risk talent requirements, please don’t hesitate to get in touch.
About the Authors
Brad Knox
Global Head of Commodities and Managing Partner for North America
T: +1 646 707 2488 E: brad.knox@weareprocogroup.com
Tori Tootell
Senior Researcher | Commodities | North America
T: +1 346 347 3739 E: tori.tootell@weareprocogroup.com
