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.
Asian stocks surged on Thursday as some vessels resumed passage through the Strait of Hormuz, while forecast-beating results at Nvidia and a suspended workers' strike at Samsung Electronics lifted shares of chipmakers.
Belarusian President Alexander Lukashenko has said Belarus will not be dragged into the war in Ukraine, while also stressing that Minsk and Moscow would jointly respond to any aggression against them.
The penultimate day of the World Urban Forum 13 in Baku will see Azerbaijan's Pavilion highlight post-construction efforts in Garabagh and East Zangezur, as well as host events on the future of Baku and architectural education.
NATO fighter jets were activated on Thursday (21 May) after at least one drone entered Latvian airspace, according to Latvia’s armed forces, marking the latest in a series of security incidents across the Baltic region linked to the war in Ukraine.
A French appeals court has found Airbus and Air France guilty of corporate manslaughter over the 2009 Rio–Paris crash, marking a major development in a case that has stretched on for 17 years.
Kevin Warsh will be sworn in as chair of the U.S. Federal Reserve on Friday as policymakers consider higher interest rates to tackle inflation linked to the Trump administration’s Iran policy.
A government-mediated agreement has suspended an 18-day walkout by about 48,000 Samsung union members, easing fears of damage to South Korea's economy and global chip supply.
Asian stocks surged on Thursday as some vessels resumed passage through the Strait of Hormuz, while forecast-beating results at Nvidia and a suspended workers' strike at Samsung Electronics lifted shares of chipmakers.
Elon Musk’s SpaceX will have to improve its reliability before receiving approval for its target 10,000 launches annually within five years, Bryan Bedford, Head of the U.S. civil aviation agency, the Federal Aviation Administration (FAA), has said.
Demand for electric vehicles has surged across Europe as elevated fuel prices linked to the Iran conflict push consumers toward new and second-hand EVs, according to data shared with Reuters. It is providing a boost to an auto industry that has struggled with slower-than-expected adoption.
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