"Brent crude prices have surged to above $110 per barrel, eerily close to the peaks seen during the Russia-Ukraine shock. UK gas futures have also risen, reaching around 172 pence per therm - their highest level since early 2023 - but remain well below the extremes of 2022."
"Gas accounted for around 40% of UK electricity generation at the onset of the Russia-Ukraine conflict, and as Europe scrambled to replace Russian supply, wholesale gas prices saw an unprecedented surge."
"The current episode is narrower in scope, and its geography matters. The Strait of Hormuz remains a critical chokepoint, through which around a fifth of global oil supply and a significant share of LNG trade passes."
"The economies most directly exposed to disruption are those reliant on Hormuz-routed shipments, particularly in Asia, including China, India, Japan and South Korea."
The conflict in the Middle East is causing instability in energy markets, leading to inflationary pressures in the UK economy. Brent crude prices have surged above $110 per barrel, while UK gas futures have reached their highest levels since early 2023. This situation differs from the 2022 crisis, as the current disruption is narrower in scope and affects different economies. The UK's exposure to this conflict is less direct compared to other nations reliant on oil and gas from the Gulf region.
Read at London Business News | Londonlovesbusiness.com
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