The Next Commodity Conflicts

The global economy is facing an intricate crisis, two years ago we were crawling out of the pandemic’s loopholes, not that long countries are suffering from high inflation that hadn’t been witnessed for decades, energy skyrocketing prices, and supply chain disruption padded by the Ukrainian- Russian military conflict which exponentially escalated to a war between the most potent global pillars, NATO and Russia which China and India hypothetically support.


Not to be underweighting the current global political and economic maze, but our planet will be struggling with severe water shortage over the 20th century since global water use grew more than twice the increase in population. Roughly, a quarter of the world's population is facing severe water shortages at least one month out of the year while 40% of the world population is facing water scarcity. According to predictions by the United Nations, famine would put up to 700 million people at risk of displacement by 2030. 


Governments are aware that the conflict is leading many regions, especially where water rationing applies. The European commission's joint report center estimates that 75-90% chance of wars being fought over water in the next century. The report center identified five main regions that would witness war conflicts where water is being shared through quota agreements between countries. The Ganges-Brahmaputra region, where the water flows through Bangladesh and India; the Colorado river which runs through the United States and Mexico; the Indus region, which has water bodies separating India and Pakistan; the Tigris-Euphrates, which flows through Turkey, Syria, Iraq, Iran, and Kuwait; and finally, the Nile that runs through 11 African countries. It is also clear that most conflicts will be agriculture-related as it requires 70% of fresh water. To no surprise, the water turns out to be a commodity, in fact, a scarce one for which indices and ETFs have been developed and traded globally.


iShares U.S Utilities ETF ( IDU.ETF): The iShares U.S. Utilities ETF seeks to track the investment results of an index composed of U.S. equities in the utility sector.





The ETF is in an uptrend, it broke the February 2020 high price of $88.68 in March 2022, reaching an all-time high of $94.22 in March 2022. The ETF corrected downwards 50% to $78.17 and currently trading at $84.70. The current resistance is $88.70 followed by $94.20 and $104. On the other hand, closing below the support price zone of $83 signals weakness in the long-term trend which might drive the price down to the second support price zone of $78 followed by $72.




Source :


Another means to invest in the water industry is trading popular indices. Mentioning a few, the Dow Jones US water index constitutes approximately 20 stocks with a minimum market capitalization of $150 million. The MSCI Global Sustainable Water Index provides an international view of the water industry as it focuses on developed and emerging markets which earn at least 50% of the revenue from water products and services.


The content published above has been prepared by CFI for informational purposes only and should not be considered investment advice.  Any view expressed does not constitute a personal recommendation or solicitation to buy or sell.  The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI.  Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.