Iran war pushes oil price above $90, threatening rise in global inflation
The Iran conflict has driven the oil price past $90 a barrel to its highest weekly gains since the Covid-19 pandemic six years ago, threatening a fresh rise in global inflation,Reports that Kuwait had begun cutting production of oil at some fields after running out of space to store it drove the cost of a barrel of Brent crude to as high as $91,89 at one point on Friday – its highest since April 2024 and up from about $72,50 just before war broke out,The price of the international benchmark has surged by more than 25% since the US-Israel attack on Iran last weekend, its biggest weekly jump since the week to 3 April 2020.
Fears are now growing over a broader storage crisis in the Middle East that could force the world’s biggest oil producers to halt extraction,Holding facilities in Saudi Arabia and the United Arab Emirates could reach their limit within 20 days, according to consultants at Kpler, potentially forcing further shutdowns,This is considered a last resort for producers because the costly process of restarting can take weeks, piling further pressure on the markets,Concerns have been compounded by Qatar’s energy minister, who predicted that if the war continued unabated all Gulf energy exporters would shut down production within weeks and oil would rise to $150 a barrel,Saad al-Kaabi told the Financial Times that even if the war ended immediately it would take “weeks to months” for the Gulf state to resume its liquified natural gas exports after an Iranian drone strike damaged an important terminal.
The country accounts for about 20% of global exports of LNG,Britain relies on Qatar for only about 2% of its total gas supplies but prices on the UK gas market surged to three-year highs this week amid fears that Europe may need to pay a premium to compete with buyers in Asia for gas cargoes if deliveries do not resume soon,Iran’s Islamic Revolutionary Guard Corps have threatened to “set ablaze” any western tanker attempting to pass through the strait, which provides a vital trade route for about a fifth of the world’s oil and liquefied natural gas,At least nine vessels have been attacked in the Gulf since the US and Israel first began strikes on Iran on Saturday 28 February, according to Lloyd’s List,The market has remained unconvinced by the Trump administration’s attempt to calm nerves by offering insurance and a military escort for tankers that opt to sail through the narrow waterway, according to Aaron Hill, chief market analyst at FP Markets.
At least 600 vessels are estimated to be in the Gulf, including 15 LNG carriers and 195 oil tankers, according to Lloyd’s List.The gas market highs have fuelled inflation fears in a blow to UK government bond prices, putting the yields – the interest rate on the debt – on five- and 10-year bonds on course for their biggest one-week jump since then prime minister Liz Truss’s “mini-budget” in September 2022.Hopes of a cut to UK interest rates this month have waned through the week; the money markets now see it as just a 15% chance, down from 80% last week.Eurozone government bond prices also fell this week, putting yields on track for their biggest weekly rise since March last year.The money markets are now almost fully pricing in a rate rise from the European Central Bank by the end of this year.
Meanwhile, stock markets in Asia-Pacific countries, which rely on energy imports from the Gulf region, had their worst week since the start of the Covid-19 pandemic six years ago.In the UK, the FTSE 100 share index fell by more than 5%, its worst week since April 2025 when Donald Trump announced sweeping global tariffs.The pan-European Stoxx 600 index also fell by more than 5% over the week.Airline stocks had a torrid week.IAG, the parent company of British Airways, fell by more than 12%, while low-cost airline Wizz Air lost about a fifth of its value, after issuing a profits warning on Wednesday and predicting the Middle East crisis could wipe €50m (£43m) off its profits.
While the US dollar strengthened since the Iranian attacks began, the gold price fell by about 3.5% during the week to below $5,100 an ounce.
Airline groundings expose depth of world travel’s reliance on Gulf corridor
After nearly a week of uncertainty, airspace closures and very limited flights, news that hundreds of thousands of passengers around the world were hanging on for emerged: the Gulf-based carrier Emirates was restarting operations in earnest despite the US-Israel war on Iran.Those relieved by the restart will include the UK’s Foreign Office, after its travails in organising delayed rescue flights out of neighbouring Oman.Emirates plans to return to 11 daily flights to five British airports by Saturday, and will operate to 60% of its full network, 83 destinations in all, including seven US airports and a total of 22 daily flights to India.Yet the partial return will struggle to dispel the doubts raised by a week when many started to wonder, just where will the world fly now?Before the crisis, the three big Gulf hubs – Dubai, home of Emirates, Abu Dhabi for Etihad and Qatar Airways’ Doha base – had established themselves as the crossroads of global aviation, with networks that link Asia, Africa, Europe and reaching out to the Americas and Oceania.Nearly 300,000 people pass through one of the three hubs every day and about two-thirds are heading straight through on a connecting flight
Investors are expecting Donald Trump to back down in the war with Iran – but what if he doesn’t?
Investors over the past year have learned that Donald Trump has a boundless capacity to quickly reverse course in the face of acute political or market pressures.But a week since the United States and Israel launched missile strikes on Iran, there are fears the war could morph into a protracted conflict.In purely economic terms, the war has brought about what has long been considered a worst-case scenario from a conflict in the Middle East: the closure of the strait of Hormuz, through which travels a fifth of the world’s oil and gas supplies.Since the start of the hostilities, the global benchmark oil price has jumped by 17% to more than US$85 a barrel, triggering shock waves through financial markets.The Australian sharemarket has been relatively shielded from the worst of the fallout, but still suffered a steep 3
The Guardian view on AI in war: the Iran conflict shows that the paradigm shift has already begun
“Never in the future will we move as slow as we are moving now,” the UN secretary-general, António Guterres, warned this week, addressing the urgent need to shape the use of artificial intelligence. The speed of technological development – as well as geopolitical turbulence – is collapsing the distinction between theoretical arguments and real world events. A political row over the US military’s AI capabilities coincides with its unprecedented use in the Iran crisis.The AI company Anthropic insisted that it could not remove safeguards preventing the Department of Defense from using its technology for domestic mass surveillance or autonomous lethal weapons. The Pentagon said it had no interest in such uses – but that such decisions should not be made by companies
Ben Affleck sells his AI postproduction startup to Netflix
Ben Affleck has sold his artificial intelligence company to Netflix in a surprise deal, saying he had been driven to embrace a technology that had initially “really scared” him.Netflix has acquired the postproduction startup InterPositive from the Oscar-winning actor, director, producer and screenwriter for an undisclosed sum.Affleck had kept InterPositive below the radar and had previously played down AI’s creative abilities. This year, he told the podcaster Joe Rogan he did not think the technology would be able to “write anything meaningful” or make films “from whole cloth”.However, in a video announcing the transaction, the Good Will Hunting and Gone Girl actor said he had moved from being scared of AI’s potential impact when he first encountered the technology to viewing it as a “really meaningful innovation”
Australia v India: one-off women’s cricket Test, day two – live
17th over: Australia 64-4 (Rawal 29, Deepti 0) An accurate maiden from McGrath to Deepti. It feels like the net is closing around India, who have scored only one run in three overs since the dismissal of Harmanpreet.16th over: Australia 65-4 (Rawal 29, Deepti 0) Rawal squeezes Sutherland to gully, where Brown takes a smart catch and holds the ball up tentatively in celebration. The players arenm’t sure whether it was a bump ball; the umpires go upstairs and replays show that Rawal did indeed hit the ball into the ground before it flew to Brown.15th over: Australia 65-4 (Rawal 29, Deepti 0) A quiet second over from Tahlia McGrath
Defending champion Norris slams ‘worst’ F1 cars after torrid Australian GP qualifying
Three world champions – Lewis Hamilton, Max Verstappen and Lando Norris – have delivered a damning verdict on Formula One’s regulations overhaul after qualifying for the Australian Grand Prix.Norris, McLaren’s defending champion, was scathing of the changes, saying that driving the car “sucks” and they were probably the “worst” ever made, while Hamilton criticised the new engine and chassis rules as “completely against” F1’s principles.Mercedes’s George Russell took pole position for the first race of the season with a dominant performance, more than eight-tenths of a second quicker than McLaren’s Oscar Piastri, who qualified fifth. But with the new regulations requiring complex energy management across a lap, many drivers were dismissive.Norris, who won his first title last season but could manage only sixth on the grid in Melbourne on Saturday, was among those who doubled down on complaints that have been circulating throughout the pre-season and have reached a head at Albert Park
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