The ongoing conflict between the US and Israel on one side and Iran on the other has sent shockwaves through global oil markets, with prices surging past $100 a barrel and concerns mounting over long-term disruptions to energy supplies. As the situation in the Middle East worsens, the G7 nations are convening an emergency meeting to address the economic fallout, with the rising cost of oil and gas at the forefront of discussions.
On Monday, March 9, 2026, global crude oil prices hit nearly $120 a barrel, driven by fears of a protracted conflict that could block vital energy routes through the Strait of Hormuz. The Strait is one of the world’s busiest oil chokepoints, with about a fifth of global oil supply passing through it. Traffic through the narrow waterway has been severely impacted since the conflict began, exacerbating concerns of a prolonged energy crisis.
The UK’s FTSE 100 stock index also took a significant hit, dropping by 1.3% as investors braced for the ripple effects of rising oil prices on global markets. In response, the finance ministers of the world’s leading industrialized nations, including UK Chancellor Rachel Reeves, will meet to explore possible solutions to mitigate the economic consequences.
The Financial Times reported that the G7 ministers are considering a joint release of oil reserves, coordinated through the International Energy Agency (IEA), in an effort to stabilize the market. If agreed upon, it would mark the first time since 2022—when reserves were released following Russia’s invasion of Ukraine—that the IEA has intervened to ease global energy pressures.
However, energy analysts warn that the worst may be yet to come. “The longer the conflict lasts, the more nervous the oil markets are going to be,” said Paul Gooden, head of natural resources at NinetyOne Asset Management, in an interview with the BBC. He cautioned that oil prices could reach as high as $150 a barrel, prompting what he described as “demand destruction,” where consumers begin to cut back on their oil usage due to soaring prices.
Gas prices have also skyrocketed, with UK natural gas prices jumping nearly 25% on Monday alone. While the surge is significant, they remain well below the record highs set in 2022 during the Russia-Ukraine conflict, when gas prices peaked at 640p per therm.
In addition to the economic impact, the geopolitical situation is also evolving. On Sunday, Iran announced the appointment of Mojtaba Khamenei, the son of Supreme Leader Ali Khamenei, as the new head of state, signaling that hardliners continue to dominate the country’s leadership even as the conflict rages on. This move adds another layer of uncertainty to the already volatile situation.
With the conflict now entering its second week, the pressing question for many is how long the fighting will last. As the global economy teeters on the edge of a potential energy crisis, the G7’s response in the coming days will be critical to determining how far-reaching the economic impact will be.
Analysts predict that continued instability in oil and gas markets could lead to higher inflation, forcing central banks to reconsider interest rate cuts. The world now faces the possibility of sustained energy shortages that could affect consumers and businesses worldwide, with no clear end in sight to the tensions in the Middle East.
