Global markets reel as Brent crude jumps over 9 per cent on Friday to top $93 per barrel, the loftiest since autumn 2023. Qatar’s energy minister Saad al-Kaabi warns the entire Gulf’s oil and gas output could halt within days amid conflict.
Prices might reach $150 per barrel if Iran tensions drag on. “If this war continues for a few weeks, GDP growth around the world will be impacted. Everybody’s energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that can’t supply,” he told the Financial Times.
UK drivers see petrol up 3.7p and diesel 6p per litre—a 16-month high—with the Competition and Markets Authority monitoring closely. Ofgem bills may rise by July, stoking inflation fears.
QatarEnergy halted LNG after “military attacks,” invoking force majeure; Kaabi expects followers, with recovery in “weeks to months.” Strait of Hormuz flows, one-fifth of global oil, have stopped, hitting China, India and Japan despite bypasses.
Rystad’s Jorge Leon flags a “real risk to the global economy.”
“I think we’re on the edge of trying to understand if this is a very short energy crisis with limited implications, or if we’re at the beginning of a massive economic and energy crisis. If this lasts for more than two weeks, then the likelihood of seeing very significant implications for the energy system and the global macroeconomic outlook are much higher,” Leon added.
Quilter’s Lindsay James calls a full stop “extreme.”
“For households, the pressure will be felt primarily in energy prices, rather than a broad inflation shock. UK food inflation, for example, is unlikely to be significantly affected because much of the food imported into the UK does not rely on Gulf shipping routes. The bigger economic risk comes from persistently higher energy costs, which can weigh heavily on growth.”