The Iran conflict has delivered an oil price shock that analysts are now comparing to the early weeks of the Covid-19 pandemic — the last time the crude market saw such extreme weekly volatility. Brent crude surged more than 25% in the five trading days since hostilities began, reaching $91.89 per barrel on Friday and marking one of the most turbulent weeks in energy market history.
The scale of the price move has surprised even seasoned energy analysts. While geopolitical conflicts often cause oil price spikes, the combination of direct supply disruption, tanker route insecurity, and a rapidly developing storage crisis has created conditions that are uniquely severe. Kuwait’s decision to cut output at storage-full fields was a symptom of a deeper problem that could soon affect much larger producers.
Energy consultants have placed a 20-day deadline on the storage crisis facing Saudi Arabia and the UAE. If those facilities reach capacity before the conflict is resolved, the world’s biggest oil exporters may be forced to halt production entirely — a move that would be almost without precedent in modern energy markets. Given the weeks required to restart halted production, the supply impact could be felt long after any ceasefire.
Qatar’s energy chief has escalated the rhetoric further, warning that an unchecked conflict could push oil to $150 a barrel within weeks. The country’s own LNG exports — representing roughly a fifth of global supply — have already been disrupted by a drone strike on a key terminal, and the minister warned of a lengthy recovery period even in the best case. European gas prices have responded by rising to their highest levels in three years.
Financial markets have tracked the crisis with mounting alarm. Asian stocks recorded their worst week since the pandemic, the UK’s FTSE 100 fell more than 5%, and European equities followed suit. UK and eurozone bond yields surged as inflation fears returned. Interest rate cut expectations were crushed, and airlines — among the most fuel-sensitive businesses — suffered the sharpest stock market losses of the week.