By James Sillars, business and economics reporter
Oil prices above $100 a barrel would now appear to be well baked-in as hostilities in the Middle East intensify.
A barrel of Brent crude is currently trading at $109 – up more than 5% on the day – and tracking towards its highest closing daily level of the war to date.
The price spiked this afternoon after Tehran urged evacuation of key energy infrastructure across countries, including the UAE, Saudi Arabia and Qatar, pending attacks in the coming hours.
The threat followed the first direct attack on Iranian energy facilities.
Israel was reported to have targeted the sprawling Parsgas field.
Market analysts say the more damage caused to energy production in the Middle East, the greater the current supply squeeze will become.
News of intensifying attacks on oil and gas operations does not bode well, as destruction of infrastructure means it will take longer to bring output back in line and get it delivered once hostilities end.
The loss of the Strait of Hormuz shipping route has prompted Saudi Arabia to move some oil via the Red Sea instead, while Iraq has reopened a pipeline to Turkey. The volumes involved are a tiny fraction of normal capacity.
Natural gas costs have risen in sympathy with oil.
UK wholesale costs are up 6% today – 60% in the month to date.
On wider markets, the energy price surge has hammered sentiment across the board, with the FTSE 100 closing the day 0.9% lower at 10,305.
Few stocks were spared pain.
Precious metal miners suffered as gold values fell 2% on a stronger dollar.
Consumer stocks were also hurt by growing fears that a global inflation surge will kill off demand and therefore economic growth.