Oil Market Impact - The Iran conflict has pushed oil prices above $90 a barrel, marking the highest weekly gains since the Covid-19 pandemic, with Brent crude reaching $91.89, up from approximately $72.50 before the conflict began [1] - The price of the international benchmark has surged over 25% since the US-Israel attack on Iran, representing the largest weekly increase since early April 2020 [2] - Concerns are rising about a potential storage crisis in the Middle East, which could lead to major oil producers halting extraction [2] Production and Supply Concerns - Holding facilities in Saudi Arabia and the UAE may reach capacity within 20 days, potentially forcing producers to shut down operations, which is a costly and time-consuming process to restart [3] - Qatar's energy minister warned that if the conflict continues, all Gulf energy exporters might cease production within weeks, with oil prices potentially rising to $150 a barrel [4] Natural Gas Market Effects - Qatar accounts for about 20% of global LNG exports, and damage to a key terminal could delay resumption of exports for weeks to months, impacting global gas supply [4] - The UK relies on Qatar for only 2% of its gas supplies, yet UK gas market prices surged to three-year highs amid fears of competition for gas cargoes from Asia [5] Geopolitical Tensions - Iran's Islamic Revolutionary Guard Corps has threatened to attack Western tankers in the Strait, a crucial trade route for a significant portion of the world's oil and LNG [6] - The market remains skeptical of the US administration's measures to ensure tanker safety, with a significant number of vessels currently in the Gulf [7] Financial Market Reactions - Rising gas prices have heightened inflation fears, negatively impacting UK government bond prices, with yields on five- and ten-year bonds experiencing their largest weekly increase since September 2022 [8] - Eurozone government bond prices also fell, with yields on track for their biggest weekly rise since March of the previous year, indicating expectations of a rate hike by the European Central Bank [9] Stock Market Performance - Stock markets in Asia-Pacific, heavily reliant on energy imports, faced their worst week since the onset of the Covid-19 pandemic, while the UK FTSE 100 index dropped over 5% [10] - Airline stocks suffered significantly, with IAG and Wizz Air experiencing substantial declines due to profit warnings linked to the Middle East crisis [11]