Global stock markets showed mixed reactions on Wednesday as investors reacted to the ongoing US-Israel conflict with Iran.
The FTSE 100, along with major US and European indexes, rose following two days of declines. Meanwhile, several Asian indexes fell for a third consecutive day.
Oil and gas prices dipped slightly but remained high. Shipping through the Strait of Hormuz was nearly halted after Iran threatened to target vessels, raising concerns about supply.
Experts warn that prolonged high oil and gas prices could increase costs for goods and services. David Miles, from the Office for Budget Responsibility, said sustained energy price rises could push UK inflation higher, though the impact is smaller than after Russia’s invasion of Ukraine.
Brent crude has jumped 12% since the strikes began on Saturday. Saudi Arabia reported a second attempted drone attack on its Ras Tanura oil refinery this week. QatarEnergy, a major producer, suspended some liquefied natural gas (LNG) production.
UK gas prices surged over 60% since the conflict began, closing at 128p per therm on Wednesday, below Tuesday’s high of 170p.
Around 20% of global oil and gas usually flows through the Strait of Hormuz. Lloyd’s List Intelligence reports about 200 tankers are stranded, while insurance premiums for American, British, and Israeli vessels have risen sharply.
President Donald Trump pledged risk insurance and Navy protection for tankers but did not specify how escorts would operate.
Lindsay James of Quilter said markets may be overly optimistic. “Iran is well equipped to resist any ships. The solution is a peace agreement, which seems distant,” she said.
US Treasury Secretary Scott Bessent noted that global crude markets remain well supplied despite the disruptions.
