The Strait of Hormuz is blocked, Brent crude has surged past $100 a barrel, and the FTSE 100 has shed more than 11% since conflict erupted at the end of February 2026. If you have a pension, an ISA, or any exposure to the UK stock market, this crisis is already touching your money – whether you’ve noticed it yet or not. Here’s what every UK investor needs to understand anout oil prices right now.

The Chokepoint That Controls Global Energy

The numbers alone explain why markets panicked. In 2024, approximately 20 million barrels of oil and petroleum products transited the Strait of Hormuz every single day – roughly 20% of all global petroleum consumption and over 25% of all seaborne oil trade. Around 138 commercial vessels made the passage daily, with annual transits exceeding 30,000 ships.

Crucially for the UK, approximately one-fifth of the world’s liquefied natural gas (LNG) trade also passes through the Strait, the vast majority of it from Qatar. When QatarEnergy halted LNG production in early March 2026 following attacks on its Ras Laffan and Mesaieed processing sites, it removed nearly 20% of global LNG supply from the market almost overnight.

“The UK is still too dependent on gas, the price of which is set on international markets beyond the UK’s control.” – Energy and Climate Intelligence UnitThe “War Premium” Is Already Priced In

Brent crude rose approximately 20% in just six trading sessions following the first US-Israeli airstrikes on Iran on 28 February 2026, climbing from roughly $73 to $88 a barrel by early March. By 9 March, Brent and WTI had both peaked around $119 per barrel – levels not seen since the post-pandemic energy shock – before pulling back to around $103.

This initial spike is what traders call the “war premium”: a speculative surge driven not by physical shortages (yet) but by fear and uncertainty. As an investor, it is important to distinguish between this reflexive repricing and the slower, more structural damage that a prolonged closure of the Strait would cause to UK household finances.The FTSE 100: Winners, Losers & a False Sense of Security

The FTSE 100 has fallen over 11% since the conflict began, dropping below 10,000 for the first time since the index reached that milestone in early 2026. But the headline number masks a sharp divergence between sectors.

Who is gaining:

• Shell shares climbed approximately 13% in the month following the crisis onset, with BP up close to 6%
• Goldman Sachs projects Shell’s net income could increase by $3.7bn to $26.7bn, and BP’s by $2.8bn to $12.9bn, representing a combined £5bn windfall
• BAE Systems rose 5% on the first day of conflict as investors rotated into defence stocks

Who is losing:

• Airlines: easyJet shares fell 4–5% on the first day and continued declining, with thousands of flights cancelled
• Housebuilders: Persimmon and Barratt Redrow were among the biggest FTSE 100 fallers as rising rates crushed mortgage affordability
• Banks: HSBC and Barclays dropped sharply as recession risk mounted

The critical lesson for UK investors: owning the FTSE 100 through a tracker fund is not a hedge against this crisis. While energy stocks provide partial insulation from the oil price rise, they do not protect you against the domestic inflation and higher interest rates that the same crisis generates.Cost-Push Inflation: The Silent Portfolio Killer

Energy directly and indirectly accounts for 14.5% of the UK’s inflation basket. With Brent crude surging and Qatari LNG offline, analysts are now warning that UK CPI – which had almost returned to the Bank of England’s 2% target – could re-accelerate to above 5% over the next 12 months if the Strait remains closed.

The Bank of England faces a brutal dilemma. The 10-year gilt yield surged above 5% for the first time since July 2008, with 2-year yields jumping above 4.6% and 30-year gilts hitting 5.6%. Higher rates mean higher mortgage costs, tighter business credit, and reduced disposable income – all of which compound the inflationary damage already entering UK supply chains via rising transport and manufacturing costs.Safe Havens Are Behaving Strangely

In a textbook crisis, investors flee to gold, gilts, and US Treasuries. This time, the playbook has been upended.

Gold has fallen more than 15% since the Iran conflict began – despite this being precisely the scenario gold bulls had argued would propel it to new highs. Three forces are responsible: a surging US dollar making gold more expensive in other currencies, rising bond yields making fixed-income alternatives more attractive, and forced selling by investors covering losses elsewhere in volatile markets.

UK gilts have also sold off rather than rallied, with yields spiking to decade-highs as markets priced in rate hike risk rather than recession-driven rate cuts. Global bonds have lost over $2.5 trillion in value as oil-driven inflation fears eroded rate-cut expectations worldwide. Some bond managers are now calling current gilt yield levels an opportunity, but that is a medium-term view, not a short-term safe harbour.

The LNG Factor: Why the UK Is Especially Exposed

The Hormuz crisis hits the UK harder than most Western economies because of one structural vulnerability: gas dependency. The UK’s heating and electricity systems remain heavily reliant on imported gas, and the Strait of Hormuz is the transit route for Qatari LNG, which supplies roughly 11% of Europe’s LNG imports.

Even before the current crisis, Dyce Energy warned that if the Strait remains effectively closed for weeks and Qatari LNG production stays offline, the UK will feel it through higher wholesale costs that feed into business energy contracts and the domestic price cap. European gas prices have already surged from approximately €30 to €45 per megawatt hour. For UK households, that means another potential round of energy bill shocks – and for investors, it means further pressure on consumer-discretionary stocks as spending power is squeezed.

What Should UK Investors Actually Do?

There is no clean, risk-free answer – but there are structured responses grounded in the current environment.

Near-term positioning to consider:

• Allocations to diversified commodities, direct energy exposure, and energy equities can help “own the problem” rather than simply suffer it.
• Defence stocks (BAE Systems, Babcock, Chemring) have historically outperformed during Middle Eastern escalations and have again in this crisis.
• Short-duration bonds may offer better protection than long-dated gilts if inflation continues to re-accelerate

Things to avoid assuming:

• That FTSE 100 index exposure automatically hedges your energy risk – it partially does on the equity side, but not on the inflation side
• That gold is the reflexive safe haven it once was – this crisis has demonstrated that assumption needs revisiting
• That the situation will resolve quickly: the current crisis has already lasted longer than initial market expectations

In Summary

• The Strait of Hormuz carries 20% of global oil consumption and 20% of global LNG trade – a sustained closure is a systemic economic event, not a regional footnote
• Brent crude surged roughly 20% in six sessions after the first strikes on Iran, with peaks near $119/barrel – the war premium is real and immediate
• The FTSE 100 has lost over 11% since the conflict began, with stark divergence between energy/defence winners and airline/retail/banking losers
• UK gilt yields hit 5% for the first time since 2008, as the market priced in Bank of England rate hikes rather than rate cuts
• Gold’s 15% decline in this crisis challenges its safe-haven status and forces a rethink of traditional portfolio defence strategies
• The UK’s gas dependency makes it structurally more exposed than most peers – UK CPI could re-accelerate to 5%+ if the Strait remains closed for months

The deeper question this crisis forces every UK investor to confront is this: in a world where geopolitical black swans are becoming quarterly events rather than once-a-decade shocks, is your portfolio built for a world of persistent energy volatility – or is it still calibrated for the era of cheap, stable globalisation?