Hormuz Closure Risks UK Recession Amid Soaring Energy Prices
The Strait of Hormuz closure is putting pressure on the UK economy, threatening to tip it into recession. The Islamic Revolutionary Guard Corps shut down the strait on February 28, 2026, causing oil and liquefied natural gas (LNG) trade to grind to a halt.
As a result, Brent crude prices have risen by 10-13% since the closure began, with refined product prices in affected regions reaching $195-$200 per barrel as of July 2026. EY's forecast predicts UK GDP growth at just 0.3% for 2026 if the strait stays closed through year-end.
The UK is particularly exposed to the disruption due to its structural dependence on imported energy. Higher energy costs feed into transport costs, which in turn affect food prices and wage demands. This could undo some of the progress made in bringing inflation under control.