Global oil prices have climbed amid mounting fears that a fragile US-Iran ceasefire may collapse, after a wave of strikes on Lebanon, raising fresh questions about the security of vital energy routes.
Tehran warned of a “regret-inducing response” if the attacks continue, while US President Donald Trump insisted American forces would remain in the region until Iran complies with what he described as the “real” ceasefire agreement.
Markets had initially rallied on news of a pause in hostilities, with hopes pinned on the reopening of the crucial Strait of Hormuz, a shipping artery through which roughly a fifth of the world’s oil supply passes. But optimism quickly evaporated.
Reports that Iran could keep the strait closed following the Israeli strikes have reignited fears of prolonged disruption. Brent crude rose 2% to $96.53 a barrel, while US-traded West Texas Intermediate climbed 2.8% to $97.02, reflecting what US Vice President JD Vance called a “fragile truce”.
Stock markets also retreated, Japan’s Nikkei 225 fell 0.5%, and South Korea’s Kospi dropped 1.8%, as investors digested the renewed uncertainty.
“There’s a little bit of nervousness in global markets,” said Victoria Scholar, head of investment at Interactive Investor. “Markets are giving back some gains… reflecting uncertainty over whether the Strait of Hormuz is actually open.”
Shipping through the strait remains severely constrained. Only a handful of vessels have crossed since the ceasefire was announced, far below the roughly 130 ships that passed through daily before the conflict. Iran’s navy has reportedly warned that any unauthorised vessels attempting to transit the waterway “will be targeted and destroyed”.
Maritime experts say it could take at least 10 days to clear the current backlog, even if normal traffic resumes immediately.
For global energy markets, the implications are stark. Any sustained disruption in the Gulf risks tightening supply, pushing prices higher, and fuelling inflation worldwide.
Britain’s North Sea question resurfaces
Against this volatile backdrop, the UK’s reliance on imported oil and gas is once again under scrutiny.
Britain continues to import significant quantities of hydrocarbons, even as it scales back domestic production in pursuit of net zero targets. Critics argue that this approach amounts to “wonky carbon accounting”, reducing emissions on paper while relying on fuels extracted and transported from abroad.
Oil and gas shipped thousands of miles to the UK carry their own carbon footprint, from extraction to transportation, often under less stringent environmental standards than those applied in British waters.
Supporters of expanding North Sea production argue that using domestic reserves could reduce exposure to geopolitical shocks like those unfolding in the Middle East, while also supporting jobs and tax revenues at home.
They point out that the UK will continue to require oil and gas for years to come, even under ambitious energy transition plans. Producing these resources domestically, they argue, could offer a more secure and potentially lower-emissions alternative to imports.
Opponents, however, maintain that further development of the North Sea risks undermining climate commitments and delaying the shift to renewable energy.
A fragile system exposed
The current crisis highlights the delicate balance underpinning global energy markets.
Companies are struggling to plan amid rapidly shifting developments. “It is very difficult to plan because every day you get very different news,” said Nils Haupt of shipping firm Hapag-Lloyd, which still has vessels in the Persian Gulf.
There are also concerns that new costs could emerge. Shipping firms are awaiting clarity on whether fees will be imposed for passage through the Strait of Hormuz, a move that could dramatically increase global transport costs.
Meanwhile, diplomatic efforts continue. JD Vance is expected to take part in negotiations with Iran in Pakistan this weekend, as world leaders seek to stabilise the situation.
For Britain, the episode serves as a reminder of how events thousands of miles away can ripple through its economy — and reignite debate over whether relying on distant energy supplies is a risk the country can afford to take.
