Greenpeace warns of ‘disaster waiting to happen’ in the Gulf
PS: Greenpeace have warned that a disaster is waiting to happen as “85 large oil tankers” are trapped in the Persian Gulf, amid attacks on ships.
Nina Noelle at Greenpeace Germany, which has been mapping oil tankers trapped in the area and potential impacts of an oil spill, says:
“Right now, there are dozens of tankers carrying billions of litres of oil trapped in the Persian Gulf as mines are being laid and missiles are hitting ships. This is an environmental disaster waiting to happen. A single oil spill in the Gulf could damage this fragile marine habitat beyond repair with devastating consequences for people, animals, and plants in the region, adding to the terrible human toll this illegal war has already taken on local communities.
“The US-Israel attack on Iran and subsequent strikes by Iran on neighbouring Gulf countries has shown once again that our dependence on fossil fuels is a constant threat to peace, security and prosperity. When oil and gas prices surge, fossil fuel giants rake in more profits while everyday people are hit by higher costs for heating, electricity, transport and food.
Updated
Closing post
Time to recap
Oil prices have jumped again after a statement from Iran’s new leader said the crucial Strait of Hormuz should remain closed.
Brent crude has climbed by 10% to over $101 a barrel, on track to end the day over the hundred dollar a barrel mark for the first time in the crisis.
US crude is also up 10% at $96.55 a barrel.
Crude prices jumped after Iran’s supreme leader, Ayatollah Mojtaba Khamenei apparently called for national unity and said that all US bases in the region should close or face attacks.
The strait of Hormuz will remain closed in order to pressure Iran’s enemies, Khamenei reportedly said.
Oil had already climbed after Iran escalated its retaliation over the conflict, with strikes on several ships in the Gulf.
The International Energy Agency has warned that the war in Iran has cut the region’s oil and gas production by at least 10m barrels of oil a day.
In its latest oil report, the IEA says:
With crude and oil product flows through the Strait of Hormuz plunging from around 20 mb/d before the war to a trickle currently, limited capacity available to bypass the crucial waterway, and storage filling up, Gulf countries have cut total oil production by at least 10 mb/d.
In the absence of a rapid resumption of shipping flows, supply losses are set to increase.
Economists have warned that higher energy prices run the risk of creating ‘stagflation’, where inflation jumps and growth fizzles out.
The US White House are reportedly planning to temporarily waive a century-old maritime law that requires American ships be used to transport goods between US ports.
President Trump has also claimed that the surge in oil is good for the US, arguing:
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,”
Bloomberg Economics have estimated that a one-month closure of the strait of Hormuz would drive Brent toward $105 a barrel.
A three-month shutdown could push peak prices near $164, according to their modelling of the impact of a prolonged halt in traffic.
Estimates from Bloomberg @economics:
— Kevin Gordon (@KevRGordon) March 12, 2026
Strait of Hormuz being closed for 3 months would get Brent crude #oil up to $164/barrel pic.twitter.com/KupcvdQbLi
Bloomberg: Trump Administration set to suspend Jones Act to tame oil prices
The Trump administration is reportedly preparing to issue temporary waivers for a century-old maritime law requiring American-built ships be used to transport goods between US ports.
The Jones Act (Merchant Marine Act of 1920) is a federal law which dictates that goods shipped between US ports are transported on ships that are US-built, owned, and operated.
This rather protectionist measure is designed to protect America’s domestic maritime industry.
Bloomberg reports that a 30-day waiver for the Jones Act will be introduced, to allow foreign tankers to help supply refiners on the East Coast with fuel from the Gulf Coast and elsewhere in the US.
That might reduce the risk of energy shortages within the US, but won’t help ease the supply problems through the Gulf following the Iran war….
The Jones Act was previouly waived in 2017, to help speed up the delivery of supplies to Puerto Rico after Hurricane Maria.
IMO calls Extraordinary Council meeting to discuss situation in Middle East
UN agency the International Maritime Organization has called an extraordinary council meeting to discuss the situation in Middle East.
The IMO says the session will be held in London on 18 to 19 March, and will focus on the impact on shipping and seafarers in the Arabian Sea, the Sea of Oman and the Gulf region, particularly in and around the strait of Hormuz.
Updated
Brent back at $100 a barrel
Brent crude has just hit the $100/barrel mark again, as investors react to Iranian Supreme Leader Mojtaba Khamenei’s call to keep the strait of Hormuz closed.
The international benchmark is trading at $100.20 a barrel, back towards levels hit very early in today’s session when attacks on tankers in the Gulf pushed up energy prices.
The US dollar is acting as a popular ‘flight to safety’ trade, as investors try to shelter from the fallout from the Middle East conflict.
The dollar index, which measures the greenback against a basket of rival currencies, is up almost 0.4% today. That strength has pushed the pound down over half a cent, to $1.3350.
Finanial markets will experience their maximum panic over the Iran war within the next one to three weeks, consultancy Alpine Macro predicts today.
That panic will come, Alpine say, as investors digest the possibility of escalation, potential closure of the Strait of Hormuz, and possible disruptions in the Red Sea.
Alpine had originally predicted the conflict would last up to three weeks – but now sees it lasting around two months.
Dan Alamariu, chief geopolitical strategist at Alpine Macro, says:
“We initially estimated the conflict to last 1-3 weeks, with a maximum of two months.
As the war unfolds, we now expect something closer to roughly two months, though the dynamics remain self-limiting.”
And how might it end? Alpine predicts an informal ceasefire in which all parties can claim victory.
Updated
US crude oil is also moving higher, after Mojtaba Khamenei said the strait of Hormuz should remain closed.
West Texas Intermediate (WTI) oil is up 8.7% today at $94.92 a barrel, towards levels last seen on Monday (when crude smashed its way through the $100 mark).
If WTI rises over $100/barrel again, and stays there, it would increase the risks of a recession.
Jim Smigiel, chief investment officer at SEI, says:
“The situation in the Middle East remains fluid, with the closure of the Strait of Hormuz impacting a significant amount of global oil capacity and pushing WTI crude above the $100 threshold.
Historically, a price spike of this magnitude - above the highest level of the prior three years - is a well-known precursor to recessions and equity bear markets. While higher energy prices increase the risk of accelerating inflation, the dynamics are complex to model. Central bankers must now weigh these inflationary pressures against labor market risks, a balancing act that has defined the global economy across several supply shocks in recent years.”
Iran's Supreme Leader Mojtaba Khamenei says strait of Hormuz should remain shut
Oil is nudging back towards the $100 mark, after Iranian Supreme Leader Mojtaba Khamenei said on Thursday the strait of Hormuz should remain closed as a tool of pressure.
In a message read out by a state TV broadcaster, the first the new supreme leader has issued since he was appointed to succeed his slain father, Mojtaba said all U.S. bases in the region should be closed as they would be attacked.
Brent crude is now trading above $99 a barrel, having hit $101.59 barrel early today before dipping back into double figures.
Updated
Wall Street opens lower
As predicted, Wall Street’s main indexes have opened lower.
The surge in the oil price back towards $100 a barrel today, after Iran escalated its attacks, is fanning inflation fears.
The Dow Jones industrial average has dropped by 519 points, or 1.1%, to 46,897 points in early trading.
Most stocks on the DJIA are down, led by construction equipment maker Caterpillar (-3.1%) and Goldman Sachs (-2.8%).
The broader S&P 500 share index index is down 0.95%.
Trump: Important to stop Iran getting nuclear weapons
Donald Trump has posted on Truth Social that the US will be making “a lot of money” from higher oil prices:
The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money. BUT, of far greater interest and importance to me, as President, is stoping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World. I won’t ever let that happen! Thank you for your attention to this matter. President DONALD J. TRUMP
Fact check: Leaving aside the president’s spelling of ‘stopping’ (I’m not one to cast aspersions!), the profits of higher oil prices won’t be shared evenly.
A recent paper showed that after the 2022 oil price surge in the US, 50% of the windfall benefit from higher prices in the sector went to the wealthiest 1% of individuals, via the stock market. The bottom 50% of people received only 1%.
That’s from my colleague Heather Stewart’s column on Sunday:
The Iran war is driving up air fares between Asia-Pacific regions and Europe.
A cascade of more than 46,000 flight cancellations has been triggered across the region since the conflict began on Feb. 28, according to data from Cirium Ltd. The crisis wiped out as much as 10% of global airline capacity earlier this month, in the biggest aviation shock since the Covid-19 pandemic.
The sudden capacity drop from Gulf airport closures has sent airfares soaring on some key routes. One economy class round-trip ticket from Sydney to London from April 3-10 has increased by more than 80% over the past two weeks, while a business class ticket for the same route was running about 40% higher, according to a Bloomberg analysis of Google Flights data as of March 12.
Iran war jitters are set to weigh on the US stock market, when trading begins in 15 minutes.
The Dow Jones industrial average is set to fall 349 points, or 0.8%, according to the futures market to 47,099 points.
No jump in US worker layoffs
The Iran conflict has not caused a spike in US layoffs, new data suggests.
The number of Americans filing new claims for unemployment support last week dropped by 1,000, to 213,000, down from 214,000 in the previous seven days.
This ‘initial claims’ data is a proxy for whether firms are holding onto staff, or cutting headcount.
Updated
Trade news: EU countries could be trading under the controversial Mercosur deal as soon as May with a key legal step towards implementation just taken in Brussels.
The “college” of European commissioners agreed today to send the “note verbale” to Paraguay which has already ratified the deal – with a group of Latin American countries – locally along with Argentina.
Under the rules, the deal will become available for traders on the first day of the second month after the note, a type of official diplomatic cable, has been sent.
It means if sent this week Mercosur could be applicable on 1 May.
The deal has yet to be ratified by the European parliament which is challenging it in the European Court of Justice.
However the European Commission’s has the power to implement it temporarily given it has already been approved by a majority of member states.
Commission president Ursula von der Leyen’s gamble has set her on a collision course with opponents including farmers and France, but her gamble will be trade will be booming by the time the ECJ rule thus making it difficult for the parliament to not ratify the deal.
Updated
U.S. Energy Secretary Chris Wright has also said today that global oil prices are unlikely to hit $200 a barrel.
Asked by CNN if oil might hit the $200 mark, due to the lack of traffic through the strait of Hormuz, Wright replied:
“I would say unlikely, but we are focused on the military operation and solving a problem.”
Denmark’s energy minister has called on citizens to reduce their energy use amid the ongoing Middle East conflict, CNBC reports.
Lars Aagaard, Denmark’s minister for climate, energy, and utilities, told local broadcaster DR:
“What the Danes should please, please, please do is that if there is any energy consumption that you can do without, if it is not strictly necessary to drive the car, then don’t do it.”
Updated
US cannot escort ships through Strait of Hormuz now, maybe by month's end, US energy chief says
This won’t reassure the oil market much!
US energy secretary Chris Wright has told CNBC on Thursday that the Navy cannot escort ships through the Strait of Hormuz now but it was “quite likely” that could happen by the end of the month, Reuters reports.
NEW: Energy Secretary Chris Wright tells CNBC that U.S. navy vessels will be escorting oil tankers through the Strait of Hormuz ‘relatively soon.’
— Jon Michael Raasch (@JMRaasch) March 12, 2026
Says it likely will happen this month.
Adds that U.S. Navy vessels are currently focused on offensive action against Iran pic.twitter.com/PQ8h7n0VL0
Lloyds banking error shows customers other users' transactions
Some customers of Lloyds, Halifax and Bank of Scotland were able to see the bank accounts of other customers when they logged into their app this morning.
Customers reported difficulties logging into their bank accounts and in some cases were able to view account details and transactions that did not belong to them.
One woman told the BBC she was able to see the accounts of six different users on the Bank of Scotland app, including some national insurance numbers, over a 20-minute period.
She could see benefits payments from the Department of Work and Pensions, which use the national insurance numbers of recipients as a payment reference. She also saw references to Waitrose transactions, despite not living near a store.
While a Lloyds Banking Group spokesperson apologised and said the incident had been quickly resolved, customers were still reporting difficulties logging into their bank accounts this morning.
Google names new HQ after Go move
Away from the energy crisis, Google has named its new European headquarters in London after a famous move in the game of Go.
After several delays and setbacks, Google has announced that it will finally start moving into the new building, at London’s King’s Cross (just across from Guardian Towers) this summer.
And it’s named it “Platform 37”.
This is a reference to a dastardly clever move played by the AI system AlphaGo in a game of Go against Go world champion Lee Sae Dol.
Google Deepmind’s Demis Hassabis explains in a blog post:
Go is incredibly complex, with more possible board configurations than the number of atoms in the known universe, and has long been a proving ground for AI research. “Move 37” was so unconventional that human experts initially thought it was a mistake. But as the game unfolded, it became clear it enabled AlphaGo to win the game.
AlphaGo’s victory heralded the beginning of what is now recognized as the modern era in AI, and catalyzed our work using AI to tackle scientific problems. Since that breakthrough, our AI systems have helped accelerate advances in fields like materials discovery, fusion energy research, mathematical reasoning and biology.
IFS: UK government should start prepping now in case energy bill support needed
The UK government should start preparing in case it needs to support households cope with surging energy prices, the Institute of Fiscal Studies says.
In a new report, the IFS point out that the shock to gas prices remains significantly smaller than during the 2022–23 energy crisis – when the Liz Truss administration capped energy bills.
But this time, the IFS says, the government finds itself in a less favourable starting position.
Bobbie Upton, research economist at the IFS, explains:
If prices keep rising, the government will face some difficult choices about whether – and how – to respond.
Support for households and businesses would help insure them against temporarily higher prices, but a repeat of the blanket support of 2022 would blunt incentives to reduce energy use when supplies are scarce. It would also put real strain on the already-fragile public finances.
Targeted support, backed by investments in better data, could deliver help to those who need it most at significantly lower cost to the taxpayer. With some time left before the next winter, now is the time to start preparing.”
An oil tanker carrying Saudi Arabian crude which passed through the Strait of Hormuz after the conflict began has docked in India.
The Shenlong Suezmax oil tanker become the first India-destined vessel to safely navigate the strategic waterway since fighting erupted between the United States, Israel and Iran late last month, according to the Hindustan Times.
It briefly went “dark” to avoid detection in the region, by turning off its automatic identification system (AIS).
It reappears on Monday on tracking maps, which show it docked in Mumbai yesterday and is still there now.
Oil at $140 could lead to "mild contractions" in eurozone, UK and Japan
Right now, Brent crude is trading just below $97 a barrel, having jumped over $100 early today after fresh attacks were reported on cargo ships in the Gulf.
But…. a sustained spike in global oil prices to $140 a barrel over a two‑month period could be sufficient to tip parts of the world economy into a mild recession, according to new analysis from Oxford Economics.
They say:
“The strength of the subsequent recovery will be determined by how quickly shipping through the Strait of Hormuz rebounds and how fast oil prices, supply-chain stresses, and financial market conditions ease.
The rebound in financial markets has been quick following past major military conflicts in the Middle East since the 1990s, but this this time it could be more gradual.”
They have calculated that if oil traded at $140 for two months, alongside a large rise in natural gas prices, there would be “mild contractions in the Eurozone, the UK, and Japan”.
Goldman Sachs have cut their forecasts for growth in the UK and the eurozone this year, due to the Middle East conflict.
They now predict the UK economy will grow 1% this year (on a Q4/Q4 basis), down from 1.5% prior to the Iran war.
The eurozone is also forecast to grow by 1% in 2026, a downgrade to 0.4% since the onset of the Iran war.
They have also made more modest growth downgrades to Sweden and Switzerland, and lifted their GDP forecast for Norway slightly.
These changes factor in Goldman commodity team’s revised forecast that oil will average $77 a barrel in 2026.
The IEA also admit that yesterday’s emergency release of oil stocks will only be a “stop-gap measure”, if the Middle East conflict isn’t resolved swiftly.
In today’s oil market report they say:
The ultimate impact on oil and gas markets and the broader economy from the conflict will depend not only on the intensity of military attacks and any damage to energy assets, but also, crucially, on the duration of disruptions to shipping through the Strait of Hormuz.
Adequate insurance mechanisms and physical protection for shipping are key to the resumption of flows, which is of paramount importance for the oil market.
IEA: largest oil supply disruption in history has removed at least 10 million barrels a day
The International Energy Agency has warned that the war in Iran has cut the region’s oil and gas production by at least 10m barrels of oil a day, as it warns that the conflict is creating “the largest supply disruption in the history of the global oil market”.
The escalating regional conflict has damaged key oil and gas infrastructure and many producers have begun shutting down production as exports via the strait of Hormuz have come to a halt and local storage facilities fill up.
In a new report, the world’s energy watchdog warned that the sharp slump in Middle East production could lead to a global slump in oil production of 8m barrels a day this year even with increased oil production from countries including Russia.
The fall in global oil supplies far exceeds the dent to global oil demand as a result of the war, according to the IEA. It has cut 1m barrels of oil a day from its global oil demand forecasts for this year due to lower refining and air travel in the Middle East.
It says:
With crude and oil product flows through the Strait of Hormuz plunging from around 20 mb/d before the war to a trickle currently, limited capacity available to bypass the crucial waterway, and storage filling up, Gulf countries have cut total oil production by at least 10 mb/d.
In the absence of a rapid resumption of shipping flows, supply losses are set to increase.
The impact of surging energy costs is also expected to weigh on global economic growth, which could cause demand to fall further, but the IEA said it was too soon to say how great the impact might be.
The global oil shortfall is expected to pile pressure on the market which is already reeling. The shut down of the strait of Hormuz, which carries a fifth of the world’s seaborne crude cargoes, has effectively wiped 15m barrels of oil a day to the global market leading to wild swings in market prices.
The Middle East war is creating the largest supply disruption in the history of oil markets
— International Energy Agency (@IEA) March 12, 2026
As a result, IEA Members have agreed to release 400 million barrels of emergency oil stocks to support market stability
More in our latest Oil Market Report ➡️ https://t.co/McMLAo4Ovn pic.twitter.com/FKwGwCd6G3
The latest UK real-time economic activity data highlights how energy prices spikes last week.
The Office for National Statistics reports that both electricity and gas prices jumped, saying:
Wholesale energy prices have increased in response to recent events in the Middle East, with the System Average Price (SAP) of gas increasing by 68% from 2.669 p/kWh to 4.477 p/kWh in the week to 8 March 2026, compared with the previous week; the System Price of electricity increased by 74% from 6.430 p/kWh to 11.170 p/kWh over the same period (National Gas Transmission, Elexon).
Wholesale energy prices have increased in response to recent events in the Middle East. In the week to 8 Mar, compared with the previous week, there were increases in:
— Office for National Statistics (ONS) (@ONS) March 12, 2026
· System Average Price of gas (68%)
· System Price of electricity (74%)
Read more ➡️ https://t.co/YydX4E7oQJ pic.twitter.com/wOkXCMaYvt
UK accountants fear supply chain disruption from Middle East crisis
A survey of chartered accountants in the UK and the regions most affected by the Middle East conflict has found that a majority believe their businesses and organisations are vulnerable to supply chain disruptions and higher costs.
In a potentially disturbing re-run of the problems businesses faced at the outset of Russia’s invasion of Ukraine, 56% of nearly 500 ICAEW members polled said they were exposed to the current conflict, while over a quarter (29%) think it’s too early to judge.
The respondents, who tend to be senior staff, including finance directors based in organisations across the world, said higher energy costs and supply chain disruption were “key business concerns”.
Two thirds of UK businesses said they would be affected by higher energy costs (66%) and that government subsidies would be the most effective form of support.
Meanwhile, one of the main analysts of the UK construction sector said the industry needs “to be prepared for the worst” after a 15% year-on-year decline in the number of £100m-plus projects starting on site.
With the sector already in the doldrums, Allan Wilen, economics director at the data provider Glenigan, said:
“From housebuilding to major infrastructure, the shockwaves will be felt as the prospect of lower borrowing costs fade and as operational costs spiral from higher energy costs and reduced access to key structural materials.”
UK mortgage rates rise past 5%
Average mortgage rates in the UK are continuing to climb, as the Middle East conflict drives up borrowing costs.
Hopes of a Bank of England interest rate cut in 2026 have been crushed this week, as oil soared, prompting lenders to reprice their mortgage products quickly.
Data provider Moneyfacts has reported that the average 2-year fixed residential mortgage rate has risen to 5.04%, up from 5.01% yesterday.
Five-year mortgage rates have jumped too, to 5.13%, up from 5.09% on Wednesday.
The City money markets are now indicating there’s a 96% chance that the Bank of England leaves interest rates on hold next Thursday, at its next rate-settting meeting.
They also indicate that the BoE is more likely to have raised rates than cut them by the end of the year.
Tom Bill, head of UK residential research at Knight Frank, says:
Spare a thought for anyone sitting on a mortgage pricing committee this week.
The job of setting loan terms must be challenging when the number of rate cuts on the horizon moves around so dramatically in such a short space of time.
The reason is the roller-coaster ride on energy markets since the end of February as the Middle East conflict has unfolded.
Russia 'pockets €6bn in fossil fuel revenues' since Iran conflict began
The surge in the oil price since the Iranian conflict began has proved lucrative for Russia, a report today claims.
Urgewald, the environmental and human rights organization, has calculated that Russia has pulled in €6bn in fossil fuel revenues since the war began less than two weeks ago.
Russia is earning €510m a day from fossil fuels, 14 per cent above February levels, they say, following the drop in supplies from the Middle East.
Last week, the US temporarily authorised India to buy oil from Moscow, and hinted that it could lift considering lifting more sanctions on Russian oil.
Alexander Kirk, sanctions campaigner at Urgewald, said:
“That is the reality of fossil fuel geopolitics. When markets panic, authoritarian exporters cash in. In less than two weeks, Russia has earned an estimated €6 billion from fossil fuel exports, money that ultimately feeds the Kremlin’s war machine.
“Easing sanctions now would not stabilise markets. What it would do is allow Russia to sell the same oil for a far better price. US sanctions have forced Russian crude to trade at a steep discount. A rollback closes that gap overnight and hands the Kremlin a revenue boost worth billions, at the very moment that pressure is starting to bite.”
“This is a political choice. Governments can hold the line on sanctions, or they can signal that if energy prices rise high enough, the West will always find a reason to blink. That choice will not just prolong Ukrainian suffering. It will undermine the security of Europe as a whole.”
The aluminium price is rising again today, as traders worry that the Middle East conflict will hit supplies from the region.
On the London Metal Exchange, benchmark three-month aluminium has gained 1.32% to $3,502.50 a ton, near to a four-year high.
Aluminium on the Shanghai Futures Exchange has gained 0.4% today, to 25,240 yuan ($3,669.56) per metric ton.
Neil Welsh, head of metals at brokerage Britannia Global Markets, says:
Aluminium rose for a third day as the war in the Middle East dragged on, threatening deeper supply disruptions from local producers.
Prices closed at their highest since April 2022 after the conflict forced output cuts at smelters in the region that accounts for about 9% of global output, and the Strait of Hormuz remains effectively shut. Aluminium retains significant upside, with a scope for a move toward $3,700 a ton, BMI, a unit of Fitch Solutions Inc., said in a note.
The spike in premiums in the US and Europe reflects “mounting concern among western buyers,” it added.
Gas prices higher
European gas prices are also rising today.
The month-ahead UK gas contract is up 4.2% at 132.6p per them, while the continental European equivalent is 3.2% higher at €51.6 per Megawatt hour.
Shell's CEO banks 60% pay jump
Shell’s CEO, Wael Sawan, has secured a massive jump in pay that should protect him from the inflationary shock facing those of more modest incomes.
Shell’s annual report, released this morning, shows that Sawan’s remuneration jumped to £13.756m in 2025, up from £8.615m in 2024, an increase of 60%.
The increase was driven by a share award, worth more than £9m, which had been awarded in 2023 and has now vested.
European stock markets have opened in the red, weighed down by worries about the oil price.
In London the FTSE 100 share index is down 55 points, or 0.55%, at 10,296 points.
Defence stocks are rising, though, with BAE Systems up 2.3% and Babcock International gaining 2.1%
On The Beach suspends profit forecast after slowdown following Iran war
Holiday group On The Beach has suspended its profit guidance due to the conflict in the Middle East.
On The Beach told sharehoders this morning that its profitability will be hurt by the crisis, saying:
Whilst the Group has limited exposure to destinations in the Middle East, it has experienced a significant slowdown in demand following the onset of conflict in the region, particularly to destinations such as Turkey, Greece, Cyprus and Egypt.
The timing of when the conflict will end and the shape of recovery in demand to these destinations are unknown.
As a result, it has suspended its previous guidance that it would make an adjusted pre-tax profit of between £39m and £43m this financial year.
The latest escalation in the Iran war has hit Asia-Pacific stock markets, with Europe expected to fall at the open too.
In Tokyo, Japan’s Nikkei 225 index has fallen by 1.3% today, as has Australia’s S&P ASX 200 index.
Strait of Hormuz disruption could cause global food price shock
As well as oil, the Iran war is disrupting supplies of fertilisers, which could drive up food prices.
The strait of Hormuz is a key route for fertilisers critical to global agriculture.
Analysts have told CNBC disruptions could feed through to higher farming costs, reduced crop yields and ultimately more expensive food.
Raj Patel, a research professor at the University of Texas, has warned that fertiliser disruptions linked to the conflict could amplify global food pressures through several channels simultaneously.
Patel says:
“The Strait of Hormuz is a fertiliser chokepoint. Qatar, Saudi Arabia, Oman, and Iran together supply a substantial share of the world’s traded urea and phosphates, and virtually all of it transits Hormuz.”
49% of the world's urea exports pass through the Strait of Hormuz. Urea is the most-used nitrogen fertilizer on Earth. The Haber-Bosch process turns natural gas into ammonia, ammonia into urea, and urea into food. It alone is responsible for feeding ~4 billion people. Half the…
— Gaurab Chakrabarti (@Gaurab) March 12, 2026
Today could be another rough day for global bonds, predicts Kathleen Brooks, research director at XTB, who explains:
Oil prices remain elevated and bonds remain more sensitive than equities to inflation fears. Interest rate volatility is back, and the futures market is now predicting rate hikes for the UK once more.
The war has also prompted Goldman Sachs to push back its forecast for US Federal Reserve’s rate cuts
It now expects quarter-point reductions in September and December, having previousl forecast cuts would start in June.
Goldman Sachs raises oil price forecasts
Goldman Sachs have raised their forecasts for the price of oil at the end of this year, having concluded that there will be longer disruption to oil flows in the Strait of Hormuz.
The investment bank has raised its forecast for Brent, the international benchmark, in the fourth quarter of 2026 to $71 a barrel, up from $66 a barrel. US crude is now forecast to average $67 in Q4, up from $62, Reuters reports.
Goldman analysts in a note on Thursday said they now assume 21 days of low Strait of Hormuz (SoH) oil flows at 10% of normal levels followed by a 30-day gradual recovery, compared with their earlier expectation of a 10-day disruption.
Brent is expected to average $98/bbl in March and April, but could jump to $110 in an ‘upside risk scenario’ where flows through the strait are disrupted for a month.
Updated
Introduction: Oil crisis risks 'broader stagflationary shock' as Brent hits $100 again
Good morning and welcome to our rolling coverage of business, the financial markets and the world economy.
Hopes that the market turmoil in the energy market might have abated are fading rapidly today, as Iran escalates its attacks on infrastructure and transport networks across the Gulf.
The oil price has jumped after two tankers were set ablaze two tankers in Iraqi waters early this morning. The attacks came after senior Iranian officials warned of a long “war of attrition” that would threaten chaos in the global economy.
There are also reports that Oman’s key oil export terminal has been evacuated.
These widespread Iranian attacks on Middle Eastern energy facilities drove Brent crude over the $100 a barrel mark again in early today, hitting $101.59 a barrel; it’s now slipped back to $97.50 a barrel, up 6% today.
The jump in oil prices is fanning fears that the global economy could be tipped into stagflation – the unpleasant combination of rising prices and stagnant growth.
Brent crude pops back toward $100
— Rory Johnston (@Rory_Johnston) March 12, 2026
because, well, hard to say why it wasn’t there already pic.twitter.com/SGjbVYODt2
Yesterday’s announcement of the largest release of government reserves in history has not calmed fears of major supply shortages if travel through the strait of Hormuz is not restored.
Jim Reid, market strategist at Deutsche Bank, says investors are facing the risk of a “broader stagflationary shock”:
From a market perspective, the problem is that investors are increasingly pricing in a more protracted conflict that causes extensive economic damage. After all, with no concrete signs of de-escalation yet, that’s keeping oil prices elevated, and raising the risk of a broader stagflationary shock. Indeed, we know that investors are pricing in the longer scenarios, because the 6-month Brent future is also up +3.06% this morning to $82.97/bbl, and with each passing day it gets harder to argue that the disruption to shipping and energy infrastructure will only prove temporary.
Daniel Casali, chief investment strategist at UK wealth manager Evelyn Partners, warns that geopolitics, rather than fundamentals, are increasingly driving markets, adding:
The conflict is potentially a stagflationary shock the severity of which depends on its length and export volumes while the SoH remains closed.
Oil inventories buy time, but as they erode, risks of higher energy prices, rising inflation and market volatility increase.
The agenda
9am GMT: IEA Oil Market Report
9.30am GMT: Governor of the Bank of England Andrew Bailey giving opening remarks at the Financial Stability Board
11am GMT: Turkey interest rate decision
12.30pm GMT: US weekly jobless claims
Updated
