Iran has stepped up threats to international shipping in the Strait of Hormuz, with a senior Revolutionary Guards commander warning Tehran would ‘burn every ship’ attempting to pass and drive oil prices to $200 a barrel.
Brigadier General Jabbari, an adviser to the paramilitary Revolutionary Guard, made the remarks on state television on Monday, declaring the vital waterway effectively closed.
Escalating tensions around the Strait of Hormuz have prompted early signs of panic buying, with queues forming at petrol stations.
‘The Strait of Hormuz is closed. Anyone who wants to pass, our devotee heroes in the IRGC navy and the army will set those ships on fire,’ Jabbari said. ‘Don’t come to this region.’
In a separate message posted on the Guards’ Telegram channel, Jabbari warned: ‘We will also attack oil pipelines and will not allow a single drop of oil to leave the region.
‘Oil price will reach $200 in the coming days.’
The rhetoric from Tehran has echoed across global energy markets, with traders weighing the risk that Iran could seek to disrupt traffic through one of the world’s most strategically important waterways.
The Strait of Hormuz is a critical chokepoint for flows of both oil and gas from the Middle East, accounting for roughly a fifth of global liquefied natural gas (LNG) trade.
Even the prospect of interference has driven the wholesale gas prices sharply higher in Britain and Europe, with benchmark contracts rising by more than 50 per cent as markets respond to fears of a tighter supply.
Pictured: Workers evacuate area around Saudi Aramco’s Ras Tanura oil refinery as smoke rises following a reported Iranian drone strike
Escalating tensions around the Strait of Hormuz have prompted early signs of panic buying, with queues forming at petrol stations. Pictured: Queues for fuel at Costco in Liverpool today
Analysts warned gas prices in Britain and Europe could triple if Iran interrupts supply in the Strait of Hormuz.
A closure lasting several weeks could push European gas prices back towards levels seen during the upheaval that followed Russia’s invasion of Ukraine in 2022.
Under Britain’s regulatory system, prolonged increases in wholesale costs feed through to household bills.
Analysts at Stifel estimate that if gas prices were to triple from pre-crisis levels, the energy price cap could rise towards £2,500 a year from its current £1,641.
Shipping through the Strait of Hormuz has largely stalled after Iran attacked tankers in retaliation for US and Israeli strikes that killed Ayatollah Ali Khamenei, the country’s supreme leader.
Britain’s benchmark NBP gas price jumped by about 54 per cent to around 122p per therm, with similar increases across Europe, while Brent crude rose roughly 9 per cent to about $79 a barrel.
Most of the LNG passing through the waterway comes from Qatar, with smaller volumes from the United Arab Emirates.
Although many cargoes are destined for Asian markets such as China and India, any interruption would increase competition for alternative supplies that typically serve Europe.
Analysts said the prospect of close to 20 per cent of global LNG being cut off has driven the spike in prices, with the duration of any closure now the key question for traders.
Europe relies on LNG for around a quarter of its gas consumption and storage levels remain lower than usual after a cold winter, leaving it vulnerable if disruption persists.
‘If LNG production from Qatar/UAE was disrupted, we see a repeat of 2022: European gas prices rising to bring LNG to Europe,’ Chris Wheaton, an analyst at Stifel said.
This could mean prices surging to about three times their pre-attack levels, with European gas prices ‘returning to levels of at least €100/MWh’ and British prices hitting 250p per therm.
The UK gas price has gone up another 40% this morning
Oil prices have subsequently skyrocketed, with the global benchmark Brent crude hiking by approximately 13 per cent to the highest level recorded since July 2024
It comes as petrol stations appear to be running out of fuel as Brits scramble to fill up their vehicles before oil prices surge to ‘record levels’.
The conflict in the Middle East has affected the transport of fuel to the West after companies suspended sailing through the Strait of Hormuz following Iranian attacks on ships and ports.
Oil prices have subsequently skyrocketed, with the global benchmark Brent crude hiking by approximately 13 per cent to the highest level recorded since July 2024.
The UK gas price went up another 40% on Tuesday morning, making the per therm price 150 p.
But drivers were told ‘not to panic buy’ petrol and diesel by the AA on Monday ahead of a possible increase in costs – advice many Brits appear to have ignored.
Valero Garage in Beckenham, south London, completely ran out of petrol on Monday evening after dozens of locals rushed to fill their tanks up.
A worker revealed that some residents even arrived with petrol cans in a bid to boost their longer-term fuel supplies.
Signs reading ‘Sorry out of use’, were also spotted at the nearby BP fuel station in Croydon.
Elsewhere, pictures from stations across the nation showed thousands of Brits refuelling before prices are rumoured to surge.
