Iran’s war on oil supplies sparks queues for petrol across West amid warnings of $200 a barrel as Tehran seals Strait of Hormuz
Iran has stepped up its threats to international shipping in the Strait of Hormuz, with a senior Revolutionary Guard commander warning that Tehran will ‘burn any ship’ that tries to raise oil prices to $200 a barrel.
Rising tension around the Bosphorus has led to oil queues in the West, with long queues at stations today as drivers scrambled to buy gasoline amid fears that prices will rise further.
Brigadier General Jabbari, an advisor to the paramilitary Revolutionary Guard, made remarks on state television on Monday declaring the vital waterway effectively closed.
‘The Strait of Hormuz was closed. Anyone who wants to pass, our dedicated heroes in the Revolutionary Guard navy and army will set those ships on fire,” Jabbari said. ‘Do not come to this area.’
In a separate message posted on the Guard’s Telegram channel, Jabbari warned: ‘We will also attack the oil pipelines and not allow a single drop of oil to leave the area.
‘Oil price will reach $200 in the coming days.’
Tehran’s rhetoric resonated in global energy markets; Traders are weighing the risk that Iran may try to disrupt traffic through one of the world’s most strategically important waterways.
The Strait of Hormuz is a critical transit point for the flow of oil and gas from the Middle East, accounting for roughly one-fifth of global liquefied natural gas (LNG) trade.
Even the prospect of intervention sent wholesale gas prices sharply higher in the UK and Europe, with benchmark contracts rising more than 50 per cent as markets responded to fears of tighter supply.
Picture: Workers evacuate the area around Saudi Aramco’s Ras Tanura oil refinery as smoke rises after an Iranian drone strike
The increasing tension around the Strait of Hormuz brought signals of panic buying, with queues forming at gas stations. Image: Queues for fuel at Costco in Liverpool today
Oil prices then rose sharply, with global benchmark Brent crude rising nearly 13 percent to the highest level recorded since July 2024. Picture: Queues at Esso petrol station in Bexley, Kent
Analysts have warned that gas prices in the UK and Europe could triple if Iran cuts off supplies in the Strait of Hormuz.
A shutdown lasting several weeks could push European gas prices towards levels seen during the uprising following Russia’s invasion of Ukraine in 2022.
Under Britain’s regulatory system, prolonged increases in wholesale costs are reflected in household bills.
Analysts at Stifel predict that if gas prices triple from pre-crisis levels, the energy price cap could rise from the current £1,641 to £2,500 a year.
Shipping through the Strait of Hormuz was largely halted after Iran attacked tankers in retaliation for US and Israeli strikes that killed the country’s supreme leader, Ayatollah Ali Khamenei.
The UK’s benchmark NBP gas price has risen by nearly 54 per cent to around 122 pence per therm; There were similar increases across Europe; Brent crude oil increased by approximately 9 percent to approximately $79 per barrel.
The majority of LNG passing through the waterway comes from Qatar, with smaller volumes from the United Arab Emirates.
Although many cargoes are diverted to Asian markets such as China and India, any disruption would increase competition from alternative supplies that typically serve Europe.
The prospect of up to 20 percent of global LNG being cut has led to a rise in prices and the duration of any shutdown is now the key question for traders, analysts said.
Europe relies on LNG for around a quarter of its gas consumption and storage levels remain lower than normal after a cold winter, leaving the country vulnerable if disruption continues.
“If LNG production from Qatar/UAE is disrupted, we see a repeat of 2022: European gas prices rising enough to bring LNG to Europe,” said Chris Wheaton, a Stifel analyst.
This could mean prices rising to around three times their pre-attack levels, with European gas prices ‘returning to levels of at least €100/MWh’ and British prices reaching 250p per therm.
Petrol stations appear to be running out of fuel as Brits scramble to fill up their vehicles before oil prices hit ‘record levels’.
Petrol prices in the UK increased by 40 percent this morning
People queue for fuel at Costco in Trafford Park in Greater Manchester
The conflict in the Middle East has affected fuel shipments to the West after companies halted sailings through the Strait of Hormuz following Iranian attacks on ships and ports.
Oil prices then rose sharply, with global benchmark Brent crude rising nearly 13 percent to the highest level recorded since July 2024.
The price of gas in the UK rose by a further 40% on Tuesday morning, with the price per therm now at 150p.
But on Monday the AA warned drivers against ‘panic buying’ of petrol and diesel ahead of a possible cost increase; This is advice that many Brits ignore.
The Valero Garage in Beckenham, south London, ran completely out of petrol on Monday evening after dozens of locals rushed to fill up their tanks.
One worker explained that some residents even arrived with gas cans in an attempt to increase their long-term fuel supply.
Signs reading ‘We apologize for being unavailable’ were also seen at the nearby BP fuel station in Croydon.
Elsewhere, photos from stations across the country show thousands of Brits filling up before rumors emerged that prices would rise.
