The Strait of Hormuz oil prices surge is pushing Brent crude to $105 a barrel, with global energy markets in turmoil as the conflict between the US and Iran shows little sign of ending before the American mid-term elections in November. UK and US government borrowing costs have climbed to levels not seen in decades, raising the prospect of steeper mortgage rates and household energy bills.
Brent crude broke back above $100 a barrel on Wednesday and has continued to climb since. According to the Council on Foreign Relations, joint US-Israeli strikes on Iran triggered the closure of the Strait of Hormuz on 28 February 2026, cutting off a waterway through which a substantial portion of the world’s seaborne oil and gas passes. The same source notes that Brent crude peaked above $138 following that closure, underscoring how violently markets have reacted to the disruption.
Strait of Hormuz oil prices and the LNG crisis
The energy shock runs deeper than crude oil alone. The Council on Foreign Relations also reports that Qatar’s Ras Laffan complex, one of the world’s largest liquefied natural gas (LNG) facilities, was damaged by a missile strike. That damage has left 17% of global LNG capacity potentially offline for three to four years, a development that adds a long-term dimension to what might otherwise look like a short-term price spike.
On top of that, Brookings reports that the United States began a blockade on Iran’s crude oil exports on 13 April 2026, further tightening supply on global markets. Together, the Hormuz closure, the LNG facility damage, and the export blockade have created a supply squeeze that traders are struggling to price.
In the UK, wholesale natural gas has risen above 200p a therm for the first time since the end of 2022. European storage levels are much lower than normal for this time of year, and the push to fill reserves ahead of winter has added further upward pressure.
What higher energy costs mean for UK households and borrowing
UK consumers have some protection from short-term spikes on the wholesale gas market through Ofgem‘s price cap. But if prices stay high over a sustained period, that protection has limits. The cap is already due to increase by 3.6% at the start of October, with the next adjustment following in January.
The inflationary pressure from energy is also being felt in government bond markets. In the UK, yields on 10-year bonds reached their highest level since 2007, while yields on 20- and 30-year bonds hit levels not seen since 1998. Higher yields mean higher borrowing costs for the government at a time when public finances are already under strain, and they feed through to consumers via fixed-rate mortgages and other financial products linked to long-term rates.
Chris Beauchamp, chief market analyst at trading platform IG, said investors were becoming increasingly concerned about the economic impact of higher oil prices. ‘It feels like investors worldwide are now waking up to the crisis in oil markets,’ Beauchamp said. He warned that the surge in energy prices could weigh heavily on the global economy if it continues.
Speaking at a Republican Party convention in Texas on Wednesday, President Trump said he did not think the fighting would end until after the US mid-term elections in November, offering financial markets little reassurance that relief is near.
The situation could worsen further after Iran-aligned Houthi forces were reported to have seized Yemen’s port of Mokha, a key Red Sea port. That move raises fears of additional shipping disruptions on a route that global trade depends on heavily, piling further pressure onto supply chains already stretched by the Strait of Hormuz closure. With Brent crude at $105 today and the CFR’s recorded peak of $138 still fresh in traders’ memories, markets are watching the Gulf closely for any sign that the conflict is shifting.
