Brent crude surged close to $120 a barrel overnight, hitting levels not seen since Russia’s 2022 invasion of Ukraine as the escalating conflict in the Middle East triggered fresh concerns over global energy security.
Prices jumped as much as 29% to $119.50 before easing back to around $107 by about 6am after reports that G7 finance ministers would hold an emergency meeting today to discuss releasing strategic oil reserves.
The volatility has already rippled through global markets, with Japanese and South Korean stocks falling sharply while the US dollar strengthened on fears that higher energy prices could reignite inflation.
Analysts warned the situation could worsen if disruption in the region continues. Goldman Sachs said oil could exceed its 2008 record of $146 a barrel if the Strait of Hormuz remains blocked through the end of the month.
The turmoil reflects growing anxiety over the resilience of global energy supply and the risk that prolonged disruption could push the world economy towards recession.
The spike in oil prices comes as new figures suggest Britain’s gas system is entering a period of heightened vulnerability.
The UK currently has around 6,700 gigawatt hours (GWh) of gas in storage — equivalent to roughly one and a half days of winter demand. The figures, from transmission operator National Gas, highlight the country’s relatively limited storage capacity compared with many European nations.
However, National Gas stressed the levels are typical for this point in the year.
Energy analysts say the UK remains structurally more exposed to volatility than many European countries because it relies heavily on imports rather than large stockpiles.
'Small price to pay'
The oil price spike has also drawn a reaction from US President Donald Trump, who sought to play down the impact of the surge.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” he posted on Truth Social.
“ONLY FOOLS WOULD THINK DIFFERENTLY!”
The comments came as tensions between Washington and London resurfaced following a week of strained rhetoric between the US president and UK prime minister.
Sir Keir Starmer spoke to President Trump on Sunday — their first conversation in eight days — in an attempt to repair relations after a series of critical remarks from the White House.
Downing Street said the leaders discussed the latest developments in the Middle East and the “military co-operation” between the two countries.
Meanwhile, geopolitical tensions in Iran deepened further after reports that Mojtaba Khamenei had been named as the successor to his father, Ayatollah Ali Khamenei.
According to Fox News anchor Brian Kilmeade, President Trump is “not happy” about the development following a brief phone call with the president, although no further details were provided.
Trump had previously indicated that the 56-year-old cleric — widely seen as a hardliner closely aligned with the Islamic Revolutionary Guard Corps — would not be an acceptable future leader for the Islamic Republic.