Global oil prices rocketed on Friday after Israel launched a series of military strikes against Iran, sparking fears of a wider conflict in the Middle East and sending shockwaves through international markets and Scottish businesses.
Brent crude surged by as much as 13% – its biggest intraday gain since the early days of the Ukraine war in 2022 – peaking above $78 per barrel before settling around $73-$74. West Texas Intermediate crude also saw similar dramatic increases. The spike reflects mounting anxiety that the confrontation could disrupt oil supplies from a region responsible for about a third of the world’s crude production.
Market analysts warn that if Iranian oil is removed from the market or if the vital Strait of Hormuz is blocked, prices could soar even higher, potentially surpassing $100 per barrel.
“If oil exports through the Strait of Hormuz are compromised, we might see prices hit $100 per barrel,” said Andy Lipow, president of Lipow Oil Associates.
Market Turmoil and Expert Reactions
The oil price surge triggered declines in global stock markets, with investors seeking safety in gold and other traditional havens. Airline shares were particularly hard hit amid expectations of higher fuel costs and disrupted flight paths.
Energy market experts are closely watching for Iran’s response. “The situation is highly volatile, although it could be resolved swiftly, similar to the incidents we witnessed in April and October of the previous year when direct exchanges occurred between Israel and Iran,” said Vandana Hari, CEO of Vanda Insights. She added, “There is also the possibility that this could escalate into a larger conflict, significantly impacting oil supply in the Middle East.”
Impact on Scotland and Scottish Businesses
Scotland, with its significant oil and gas sector centred in the North Sea, is likely to feel the effects of the global price shock. The sector, already under pressure from increased taxation and policy uncertainty, faces renewed volatility. Recent UK budget changes raised the windfall tax on oil and gas profits to 38%, a move criticised by industry leaders who warn it could threaten jobs and investment in Scotland’s energy heartlands.
The wider Scottish economy is also exposed to rising energy and shipping costs. The British Chambers of Commerce reports that half of UK businesses have already been impacted by Middle East conflict, citing increased costs, shipping disruption, and uncertainty over oil prices.
“The effect on businesses here in the UK has continued to ratchet up the longer the fighting has continued. If the current situation persists, then it becomes more likely that the cost pressures will build further,” said William Bain, Head of Trade Policy at the BCC.
With the situation in the Middle East rapidly evolving, Scottish policymakers and businesses are bracing for further economic turbulence. The risk of prolonged conflict and further supply disruptions could mean sustained high oil prices, increased operational costs, and renewed pressure on key Scottish industries.
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