Skip to main contentOil markets have surged higher this morning – Monday 2nd March – following the weekend’s military strikes by Israel and the USA on Iran.
With commercial shipping effectively blocked from transiting the Persian Gulf, Brent crude prices have opened 9% higher at $79.80/bbl as most tanker owners, oil majors, and trading houses have suspended crude oil, fuel, and liquefied natural gas shipments via the Strait of Hormuz. With approximately 30% of global oil and 20% of global LNG shipped via the Strait of Hormuz, concerns are mounting that a prolonged conflict could see oil prices trading up to $100/bbl as satellite images show vessels at anchor next to major ports, such as Fujairah in the United Arab Emirates, unable to move through Hormuz.
According to the United Kingdom Maritime Trade Operations (UKMTO), two ships have already been attacked in the strait, one off Oman and the other off the UAE, with tanker owners wary of further attacks or unable to get insurance for the voyage.
Given the large volumes of LNG sourced from the Middle East, UK energy prices have also surged higher this morning, with Q2-26 gas prices jumping 20% to currently trade at 95p/therm, with seasonal contracts for Summer 26 onwards also seeing significant gains.
The lasting impact on energy markets will be solely dependent on the duration of the conflict, with military strikes by the US and Israel showing no sign of decreasing this morning as Donald Trump states that the conflict could last for four more weeks and that the attacks would continue until US objectives were met.
To date, the main impact on prices is due solely to the effective closure of the Strait of Hormuz to oil and LNG tankers, but should energy assets such as pipelines or oil and LNG export terminals be hit by either side, then we could expect to see market prices surge even higher.
If you are concerned about your business energy prices and what these changes could mean, then reach out to our Trading and Risk team directly here.
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