Oil hits highest price in two years as Iran war intensifies

• Brent crude reaches over $94
• WTI closes at $91
• US and UK markets all end down

Oil prices soared on Friday after Qatar’s energy minister said the war against Iran may cause mass shutdowns in the region and Donald Trump threatened to keep hostilities going until the Islamic Republic’s “unconditional surrender.” 

Brent crude settled up almost 9 percent at just below $93 per barrel at closing, after touching its highest price since September 2023 – $94.48.

West Texas Intermediate fetched nearly $91, a $12.2 percent increase, by 17:00 ET.

Saad al-Kaabi, the Qatari energy minister, told the Financial Times that the conflict could force most Gulf energy producers to suspend operations “in the next few days” and ultimately “bring down the economies of the world.”

Kuwait became the second country in the Gulf after Iraq to reduce output because current supply is unable to leave the region and is taking up nearly all storage capacity, according to the Wall Street Journal.

US, UK and European markets were all dragged down by the war, growing disruptions to energy flows and reported job losses in the US in February.  

The FTSE 100 benchmark was down 1.24 percent. The S&P 500 closed 1.3 percent lower, the Nasdaq dropped 1.6 percent and the Dow fell nearly 1 percent. 

The markets in Dubai and Abu Dhabi slid to three-month lows on Friday, while Saudi Arabia’s kept rising as higher oil prices are seen as benefiting its anchor stock Aramco. 

“Road fuel prices have surged this week, notably in the United States, which could convince the US administration to not only work hard on reviving trade around Hormuz, but possibly implement petroleum export restrictions,” said Norbert Ruecker, head of economics and next generation research at Julius Baer.

“Our base case scenario remains a short-lived, intense spike in energy prices.”  

The average price for gasoline at the pump across the US jumped to $3.32 per gallon on Friday, up 11.4 percent since last week and the highest since the summer of 2024, according to the American Automobile Association. 

Europe’s benchmark Dutch TTF natural gas futures has surged more than 50 percent since the start of the conflict, closing at nearly €53 ($61.60) per megawatt-hour on Friday.

President Trump for now has shrugged off the increase in energy prices. Indications from officials in the White House are that the US is preparing for the conflict to grind on for a while longer. 

Trump’s national economic director Kevin Hassett told Bloomberg TV that the administration has “a whole flow chart of tools to use” to address the bubbling energy crisis. 

The US Development Finance Corporation, the government’s international finance arm, said it is preparing a $20 billion reinsurance programme to convince shipping companies to again send their tankers through the Strait of Hormuz, though analysts were sceptical of the idea when it was first floated earlier this week. 

US gold futures were up 1.7 percent at 4:00pm ET on Friday. 

Some hopeful signs came from the aviation sector, with Dubai’s Emirates airlines in particular steadily expanding the number of active flights and “working to restore full network operations.”

Etihad Airways also said they will operate a limited number of flights from Abu Dhabi between Friday and March 19 as the Emirati carrier gradually restores services following regional airspace disruptions.