Oil rises above $100 a barrel as Middle East conflict escalates - use our tracker to see impact on prices

There is mounting concern over the impact of intensifying hostilities in the Middle East on the global economy, as oil prices topped $100 a barrel again.

A barrel of Brent crude - the international benchmark - has risen steadily since last week and is threatening to remain consistently above the $100 milestone for the first time since May.

Prices have been elevated ever since the US-Iran war began at the end of February but have, more recently, become immune to US claims, or hopes, of peace progress following several false starts.

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Oil costs have been on the rise since last week.

The latest upward pressures have included attacks on Saudi energy infrastructure by Iran-supporting Houthi rebels.

The tipping point came after Iran said it had struck a US base in Jordan.

It was an apparent response to US claims that five Iranian oil tankers had been destroyed, in retaliation for two ballistic missile strikes that targeted one of its warships.

The developments have raised fresh fears of a supply squeeze given the loss of that Iranian tanker capacity, which would probably have served Chinese orders.

The hostilities across the Middle East are preventing usual supplies of oil and natural gas to international markets, with the Iranian-controlled Strait of Hormuz usually responsible for a fifth of global oil and natural gas shipments.

While Brent crude oil costs are almost 50% up over the past 12 months, wholesale gas prices for the UK are 125% higher than in September 2025.

Use our tracker below to see the impact of the Iran war on the economy, including oil prices, which is updated throughout the day.

The disparity can be explained by the fact that oil shortfalls can usually be replaced more easily than those for gas.

There is currently a scramble across Europe for natural gas stocks, with storage levels on the continent at their lowest for 12 years after buyers in Asia were prepared to pay more for liquefied natural gas (LNG) shipments.

It's threatening an expensive winter ahead for UK energy and fuel bills, with these higher costs also expected to feed into wider inflation in the months ahead.

Stock markets were broadly lower as the oil milestone was reached while bond yields - the interest rate demanded by investors to hold government debt - were widely on the rise.

Neil Wilson, Saxo UK's investor strategist, said of the moves this week: "Markets are pricing in a longer war and more disruption to global energy markets... A sense today of disruption and conflict being a feature rather than a bug, and the implications for global markets that follow from [a] structurally higher inflation dynamic alongside fiscal pressures."

UK longer-term borrowing costs were, again, hovering close to levels not seen since the last century.

The prospect of economic damage from an acceleration in the pace of price growth is one reason why bond market investors across much of the Western world are demanding a higher premium to hold government debt.

Extra costs, and the likelihood of damage to demand in the economy from those costs alongside rising central bank interest rates to help curb inflation, place additional pressures on the public purse.

They include weaker tax receipts and a bigger debt bill.

The cost of servicing existing UK government borrowing is already tipped to exceed £110bn in the current financial year.

The market moves present a real headache for Chancellor John Healey's first budget, due towards the end of next month.

He has pledged to stick to his predecessor's fiscal rules, limiting his wriggle room for more spending without tax rises or spending cuts elsewhere.

(c) Sky News 2026: Oil rises above $100 a barrel as Middle East conflict escalates - use our tracker to se