The European Commission sees no immediate impact on the European Union's security of oil supply from the escalating conflict in the Middle East, it said in an email to EU governments, seen by Reuters on Monday (2 March).
"At this stage, we do not foresee an immediate oil SOS (security of supply) impact," the Commission email said.
The Commission is considering convening an ad-hoc meeting of its Oil Coordination Group later this week. Member states have been asked to share their assessments of oil supply security by the end of the day on Monday.
Romania has reported having enough fuel reserves for 30 days and stated that all measures are in place to prevent price surges.
Shipping companies are wary of attacks and unable to obtain insurance against conflicts as this crucial waterway handles around 20% of the world’s oil and gas.
Jorge Leon, head of geopolitical analysis at Rystad Energy, said, "The most immediate and tangible development affecting oil markets is the effective halt of traffic through the Strait of Hormuz, preventing 15 million barrels per day of crude oil from reaching markets. Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil."
Military strikes by the United States and Israel on Iran continue, while Iran has responded with missile barrages.
President Donald Trump suggested to the UK's Daily Mail that the conflict could last four more weeks, with attacks continuing until U.S. objectives are met.
While the Strait of Hormuz has not been blocked, its strategic importance, handling around a fifth of the world’s seaborne oil trade and 20% of liquefied natural gas-means any disruption can significantly impact global energy markets.
A prolonged spike in oil prices could reignite inflationary pressures globally, acting as a tax on businesses and consumers and potentially dampening demand.
OPEC+ agreed to a modest oil output boost of 206,000 barrels per day for April, but much of that product still needs to leave the Middle East by tanker.
Alan Gelder, SVP of refining, chemicals and oil markets at Wood Mackenzie, said: "The nearest historical analogue is the Middle East oil embargo of the 1970s, which increased oil prices by 300% to around $12/bbl in 1974. That is only US$90/bbl in 2026 terms. Eclipsing this in today’s market, given significant supply losses, seems very achievable."
Brent crude LCOc1 was last up 9% at $78.9 a barrel, set for its biggest daily jump since 2020's COVID-19-related turbulence and just surpassing its surge after Russia launched its full-scale invasion of Ukraine in 2022. Benchmark European gas prices surged 37.5% to one-year highs.
In the Middle East, the UAE and Kuwait temporarily closed their stock markets citing "exceptional circumstances".
The oil shock rippled through currency markets with the dollar a main beneficiary. The U.S. is a net energy exporter and Treasuries are still considered a liquid haven in times of stress, shoving the euro down 0.2% to $1.1787 EUR=EBS.
While the Japanese yen is often a safe harbour, the country imports all of its oil making the flows more two-way. The dollar added 0.3% to 156.44 yen JPY=EBS.
Bonds attracted fresh buying on Friday after UK mortgage lender MFS was placed into administration amid allegations of financial irregularities. Its collapse stoked wider credit fears, with well-known big banks among its lenders. MFS had borrowed £2 billion ($2.69 billion).
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Wall Street ended sharply lower on Tuesday as investors worried about artificial intelligence (AI) creating more competition for software makers, keeping them on edge ahead of quarterly reports from Alphabet and Amazon later this week.
U.S. stock markets finished mixed on Wednesday (28 January) as investors reacted calmly after the Federal Reserve left interest rates unchanged, a decision that had been widely expected and largely priced in.
Wall Street closed sharply lower on Tuesday as global markets fell after U.S. President Donald Trump’s new tariff threats against Europe unsettled investors and revived fears of renewed volatility.
Wall Street closed higher on Tuesday, boosted by optimism over artificial intelligence (AI) and a strong rally in Moderna shares, with the Dow Jones Industrial Average approaching a record high.
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President Donald Trump said the United States will target Iran’s heavily fortified Pickaxe Mountain site “pretty soon” as he meets with Lebanese president Michel Aoun. Meanwhile, U.S. forces carried out a 10th consecutive night of strikes on Iran while Tehran continues to target Gulf countries.
Overnight U.S. strikes caused blackouts in southwestern Iran and hit the northwestern city of Tabriz for the first time. Separately, a U.S. soldier died in northern Iraq during a controlled detonation of an unexploded Iranian drone.
Azerbaijan has rejected suggestions it played any official role in reported private talks between former German politicians and Russian representatives in Baku, saying the meetings were organised independently.
Police fired tear gas and arrested at least 15 people after clashes broke out near Buenos Aires' Obelisk, where thousands had gathered following Argentina's 1-0 extra-time defeat to Spain in the 2026 World Cup final.
China's Foreign Ministry has said it is closely monitoring the United Kingdom's nationalisation of British Steel. Prior to the British government fully taking over the loss-making company on Thursday, it was previously owned by Chinese private steelmaker Jingye.
Apple is closing in on Nvidia's position as the world's most valuable publicly traded company, as investors increasingly bet the iPhone maker can turn artificial intelligence into sustained earnings growth.
AI-powered shopping assistant Phia has been accused of using "cookie stuffing" to claim affiliate commissions for purchases it did not generate, according to a Bloomberg investigation. The company says the issue has now been resolved.
The UK government has nationalised British Steel, taking full ownership of the country's only primary steelmaker from its Chinese owners to safeguard the future of the UK's steel industry.
Saudi Arabia is moving crude through the Red Sea port of Yanbu at close to maximum capacity this week, as tensions with Yemen's Houthis add to broader concerns over Gulf shipping routes, according to data and industry sources cited by Reuters.
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