Oil prices breached the $100 per barrel threshold on Sunday for the first time since Russia's 2022 invasion of Ukraine, as escalating conflict in the Persian Gulf threatens to strangle a critical artery of global energy supplies.
The sharp rise, which saw Brent crude futures climb above $102 in Asian trading, prompted the Group of Seven industrial nations to schedule an emergency virtual meeting of finance ministers to assess the economic fallout. United Kingdom Chancellor Rachel Reeves will participate in the session, chaired by France, beginning at 13:30 UK time.
The price surge reflects mounting fears that the Strait of Hormuz, through which nearly one-third of the world's seaborne oil transits, could become impassable as tensions between Iran and a US-Israel coalition continue to escalate. Attacks on energy infrastructure across the Gulf region over the weekend, including strikes on refineries in Bahrain and Iran, have sent markets into turmoil.
"If the shutdown in the Strait lasts until the end of March, record oil prices above $150 a barrel could occur," warned energy analysts cited by the BBC. Such a scenario would eclipse the 2008 peak and trigger significant inflationary pressure globally.
The immediate impact is already visible at petrol pumps, with prices for gasoline, jet fuel, and agricultural fertilizers – all petroleum derivatives – expected to rise sharply in coming days. Asian consumers, who rely heavily on Gulf crude, have begun bidding up prices for US liquefied natural gas, causing some tankers originally bound for Europe to reverse course mid-Atlantic.
Stock markets across and opened sharply lower on Monday, with energy-dependent sectors particularly hard hit. The crisis poses a political challenge for governments already grappling with cost-of-living pressures, particularly in the , where energy price caps are due to be reviewed in July.
