The global oil price surged on Thursday as Brent crude climbed above $100 (£79) per barrel, even after major economies agreed to release a record 400 million barrels of oil from emergency reserves.
The decision, taken by all 32 members of the International Energy Agency (IEA), was meant to calm markets shaken by escalating tensions around Iran and growing risks to global energy supplies.
Despite the intervention, traders continued pushing prices higher amid fears that the conflict could disrupt oil shipments through the Strait of Hormuz, a narrow but critical shipping route in the Middle East.
For UK households and businesses, the rise matters because global oil prices strongly influence petrol costs, airline fares, transport expenses and overall inflation.
What Happened to the Oil Price?
Brent crude, the international oil benchmark used to price much of the world’s oil, including supplies affecting the UK market, rose by more than 9% during Asian trading.
The price briefly crossed $100 (£79) per barrel, a psychologically important level for energy markets. The surge came just hours after the International Energy Agency announced the largest coordinated release of oil reserves in its history.
Governments store these reserves as a safety buffer for crises such as wars, natural disasters or sudden supply disruptions.
The current release of 400 million barrels is more than double the previous record intervention, which took place after Russia invaded Ukraine in 2022.
In theory, injecting additional oil into the market should ease supply concerns and help stabilise prices. However, the continued price increase suggests investors believe the risks to global supply could last longer than the emergency reserves can cover.
Why Are Oil Prices Rising?
The main driver behind the latest oil price jump is growing concern about security in the Strait of Hormuz, one of the most important energy routes in the world.
Around 20% of global oil shipments pass through this narrow waterway, which connects major oil producers in the Middle East to international markets.
Iran has warned that ships linked to the United States, Israel, or their allies could be targeted as tensions escalate following recent military strikes.
An Islamic Revolutionary Guard Corps (IRGC) spokesperson warned that attempts to artificially lower prices would fail and suggested oil could reach $200 (£158) per barrel if the conflict intensifies.
Such a scenario would represent one of the highest oil prices ever recorded. Even the threat of disruption in the Strait of Hormuz is enough to alarm traders, because any interruption to tanker traffic could quickly remove millions of barrels of oil from global supply.
Why the Emergency Oil Release May Not Be Enough
The decision by the International Energy Agency is considered historically significant because of its scale.
The organisation represents countries responsible for roughly two-thirds of global energy production and consumption, giving it substantial influence over the market.
However, experts say the move is only a temporary stabilisation tool rather than a long-term solution.
Energy economist Martin Ma from the Singapore Institute of Technology described the intervention as a “temporary buffer” that can soften the immediate shock but cannot eliminate the underlying geopolitical risk.
Markets tend to react not just to current supply levels but also to expectations about future disruptions. If traders believe tanker routes could become unsafe or if military tensions worsen, prices can rise even when additional oil is temporarily available.
How the Rising Oil Price Could Affect the UK?
Although the conflict is centred in the Middle East, the consequences could quickly reach the UK economy. Britain imports a large share of its energy and refined fuel products, meaning domestic prices are heavily influenced by global market movements.
A sustained increase in oil prices typically pushes up petrol and diesel costs at UK forecourts within weeks.
Higher fuel prices then ripple through the wider economy because transport costs influence the price of goods, food deliveries and logistics services.
Air travel may also become more expensive. Jet fuel is closely tied to crude oil prices, so airlines often adjust ticket prices when oil becomes significantly more expensive.
For UK consumers planning holidays or business trips, this could mean higher airfares if the current trend continues.
The wider concern for policymakers is inflation. Energy costs have historically been a major driver of price rises across the economy, affecting everything from heating bills to the cost of transporting groceries to supermarkets.
Signs of Stress in Global Energy Markets
Energy markets have been extremely volatile since the US and Israeli airstrikes against Iran on 28 February, which heightened fears of a broader regional conflict.
During the past week alone, Brent crude briefly approached $120 (£95) per barrel before falling back and then rising again.
Some countries have already begun introducing measures to conserve fuel as prices rise. In parts of Asia, long queues formed at petrol stations as drivers rushed to fill up amid fears of further increases.
Governments have also started adjusting policies to reduce energy consumption. Authorities in Thailand have encouraged government staff to work from home where possible, while the Philippines has introduced a four-day working week for public sector employees in an attempt to cut fuel usage.
These measures highlight how quickly energy shocks can influence everyday economic activity.
Could Oil Really Reach £158 Per Barrel?
The warning that oil could climb to $200 (£158) per barrel is widely viewed as a worst-case scenario rather than a likely outcome in the near term.
However, analysts say such levels cannot be ruled out if the conflict escalates dramatically or if tanker routes through the Strait of Hormuz become unsafe.
For historical comparison, global oil prices reached roughly $140 (£111) per barrel during the 2008 energy crisis, which remains the modern record.
Prices significantly above that level would likely trigger widespread inflation and place pressure on economies around the world.
What Could Happen Next?
Energy markets will now focus on developments in the Middle East, particularly the safety of shipping routes through the Strait of Hormuz.
If military tensions ease or if tanker traffic continues normally, prices could stabilise as the emergency reserves begin entering the market.
However, if attacks on shipping increase or if major exporters face disruptions, traders may continue driving the oil price higher.
Governments and central banks would then face renewed pressure to manage the economic impact of rising energy costs.
