Middle East Conflict Sends Oil Prices Soaring Above $105 a Barrel

The conflict in the Middle East has sent shockwaves through global markets, causing oil and gas prices to surge. The price of oil has jumped to $105 a barrel amid signs that the conflict will not be resolved quickly. Brent crude went back above $100 a barrel on Wednesday and continued to climb.

The war has led to the effective closure of the Strait of Hormuz, preventing supplies of oil and gas from reaching global markets. This has driven up prices for both crude oil and natural gas, with wholesale natural gas prices in the UK rising above 200p a therm for the first time since the end of 2022.

The increase in energy costs has raised fears of a spike in inflation, which is already affecting bond yields around the world. In the UK, yields on 10-year bonds were at their highest level since 2007 today, while those on 20- and 30-year bonds reached levels not seen since 1998.

President Trump has stated that he does not think the fighting will end until after the US mid-term elections in November. This uncertainty is contributing to higher borrowing costs for the government, which could have a direct impact on households as well.