Oil and gas prices climbed sharply while major stock markets fell after escalating tensions in the Middle East raised concerns over disruptions to global energy supplies.
Brent crude rose above $81 a barrel, at one point briefly topping $82, while U.S. crude jumped more than 7%, pushing prices up by nearly $6 per barrel. Natural gas prices saw even steeper gains. In Europe, benchmark gas futures surged by as much as 50% before closing about 39% higher. UK gas prices spiked more than 46%, reaching levels not seen in three years before easing later in the day.
The market reaction followed continued strikes by Iran across the region in response to attacks by the United States and Israel. An adviser to the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps warned that vessels should avoid passing through the Strait of Hormuz, a vital shipping lane through which about 20% of the world’s oil and gas flows. Shipping traffic in the area has slowed significantly after multiple vessels were attacked in recent days.
QatarEnergy, one of the world’s largest exporters of liquefied natural gas, said it had suspended LNG production following what Qatar’s Ministry of Defence described as a drone attack on facilities in Ras Laffan Industrial City. The company also halted production of other materials, including aluminium, methanol and urea. In Saudi Arabia, Aramco temporarily shut its Ras Tanura oil refinery after it was hit by a drone.
The rising energy prices have raised fears of renewed inflationary pressures similar to those seen after Russia’s invasion of Ukraine. Higher oil prices can increase the cost of fuel, transport and food, while elevated gas prices could eventually affect household energy bills.
In the United States, retail gasoline prices have already begun to climb. According to GasBuddy, the national average rose five cents to $2.99 per gallon, with analysts warning further increases could follow if crude prices remain elevated. JPMorgan Chase Chief Executive Jamie Dimon told CNBC that prolonged conflict could have broader inflationary consequences, though he said short-term increases may have a limited impact.
Stock markets reacted negatively to the uncertainty. In London, the FTSE 100 fell as much as 2.6% before trimming some losses. Germany’s DAX dropped more than 2%, while France’s CAC 40 also declined. In the United States, the S&P 500 and Nasdaq opened lower but later recovered, with the Nasdaq closing slightly higher and the Dow Jones Industrial Average down modestly.
Shipping costs have also surged. Data from the London Stock Exchange Group showed that hiring a supertanker to transport oil from the Middle East to China reached more than $400,000 per day on Monday, nearly double the previous week’s rate.
Analysts said the trajectory of energy prices will depend on how long the conflict persists, the extent of supply disruptions, and whether alternative sources can offset any losses. Some warned that if tensions remain high and shipping through the Strait of Hormuz continues to be constrained, oil prices could rise further, potentially exceeding $100 a barrel.
