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Financial markets Score 92 Bearish

Record $11 Billion Flows Out of Commodity ETFs Amid Geopolitical Turmoil

Mar 25, 2026 12:49 UTC
CL=F, ^VIX, XLE
Immediate term

A surge in global tensions following U.S.-Israel strikes on Iran has triggered a historic $11 billion outflow from commodity exchange-traded funds. The exodus reflects investor panic, with energy and defense sectors facing immediate market disruption.

  • Record $11 billion outflow from commodity ETFs
  • Escalation of U.S.-Israel strikes on Iran began February 28
  • CBOE Volatility Index (^VIX) rose amid market uncertainty
  • Crude oil futures (CL=F) showed increased price pressure
  • Defense sector impacted by regional instability
  • Event marks a significant spillover from geopolitics into financial markets

Investors pulled $11 billion from commodity ETFs in a single week, marking the largest outflow in the history of the asset class. The move follows the escalation of hostilities between the U.S. and Israel on one side and Iran on the other, beginning February 28. The geopolitical shock has unsettled global markets, prompting widespread risk aversion. As volatility spiked, the CBOE Volatility Index (^VIX) climbed sharply, reflecting heightened investor anxiety. Energy markets reacted swiftly, with crude oil futures (CL=F) seeing increased momentum amid fears of supply disruption. The defense sector also came under renewed scrutiny, as investors reassessed risks tied to regional instability. The outflows underscore the vulnerability of commodity-linked investments to sudden geopolitical shocks.

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