Oil could hit $100 a barrel if Middle East conflict spreads – what it means for UK energy
The escalating conflict in the Middle East, marked by US and Israeli strikes on Iran and subsequent retaliatory actions, has sent global oil prices surging, raising fresh concerns that Brent crude could climb above $100 per barrel if tensions spread and disrupt key supply routes.
As of Monday (2 March) Brent crude was trading around $77–$80 per barrel, up sharply from levels in the low $70s just days earlier and from around $60 at the start of January.
The rapid jump reflects markets’ pricing in heightened geopolitical risks, including the effective halt of tanker traffic through the Strait of Hormuz, a critical chokepoint carrying about 20% of global oil supply and 38% of seaborne crude trade.
“Oil supply and demand fundamentals until Friday had pointed at a surplus in 2026; however, that is quickly changing as events in the Middle East play out,” said Maurizio Carulli, global energy analyst at Quilter Cheviot. “Recent weeks have seen the oil price rise from $60/bbl at the beginning of January to $72/bbl on Friday, with it climbing further today to $80/bbl as markets factor in the increased geopolitical risk.”
“If the situation precipitates into a widespread and prolonged Middle East war, with shipping across the Strait of Hormuz halted, then the oil price could feasibly rise to $100/bbl and above.”
Analysts across the industry echoed this view amid reports of disrupted shipping, anchored tankers due to insurance and seizure risks, and attacks on energy infrastructure in the region.
Satellite data indicated near-total halts in tanker transits over the weekend as a precautionary measure. Other forecasts suggested even higher spikes, to $120 in extreme scenarios, if prolonged blockages force production shutdowns after storage saturation.
In a more optimistic outcome, Carulli noted that if calm returns soon, prices could revert to $60–$65 per barrel, supported by excess production and OPEC+ spare capacity to ramp up output.
What this means for UK energy bills and consumers
The UK, heavily reliant on imported oil and gas despite North Sea production, remains vulnerable to sustained global price shocks.
A prolonged elevation in oil prices would feed through to higher petrol and diesel costs at the pump, as well as elevated wholesale gas prices that influence household energy tariffs.
While short-term spikes have limited immediate macroeconomic impact, requiring at least a month or two of sustained higher levels to meaningfully affect company cash flows or inflation, a $10 per barrel increase held over time could add roughly 30–40 basis points to consumer inflation measures, according to Carulli.
This would compound pressures on UK households already navigating cost-of-living challenges.
Energy analysts have highlighted that exploration and production-focused firms might see near-term gains from higher prices, though integrated majors with Gulf exposure (such as BP, Shell, and others) could face offsetting export constraints.
For everyday consumers, any escalation pushing oil toward or beyond $100 would likely translate to steeper fuel and heating bills in the months ahead, unless swift diplomatic progress intervenes.
Investors and policymakers alike are watching for signs of de-escalation, or further spillover, as the region braces for what could become a defining energy shock of 2026.
