A dramatic week in global financial markets has underscored the severity of the energy crisis sparked by the Iran conflict. Brent crude blasted through the $90 per barrel mark, touching $91.89 at its Friday peak — up from just $72.50 before the war began. The more than 25% weekly gain is the steepest since the early Covid-19 pandemic period and is now sending inflation fears rippling through every major economy.
News that Kuwait had begun cutting production because its oil storage was full added a fresh dimension to the crisis. It confirmed what energy analysts had feared: the conflict is not only disrupting oil flows but is also creating a physical storage problem that could force more producers to shut down. If Saudi Arabia and the UAE follow Kuwait’s lead, the world’s oil supply could take a serious hit.
Consultants monitoring Middle East storage levels warned that the region’s two largest exporters could run out of storage capacity within 20 days. Should that happen and production halts follow, the process of restarting output could take weeks — extending the supply shock well beyond the duration of any potential ceasefire. The oil market appears to be pricing in exactly this scenario.
Adding to the gloom, Qatar’s energy minister warned of an absolute worst-case outcome: if fighting continues, all Gulf energy exporters could shut down within weeks, driving oil to $150 a barrel. Qatar is already counting the cost of an Iranian drone attack on a key LNG terminal, with gas exports expected to be offline for weeks at minimum. As the country provides about one-fifth of global LNG supply, the disruption is being felt worldwide.
Stock markets around the world bore the brunt of the panic. Asia-Pacific indices had their worst week since the pandemic, the UK’s FTSE 100 fell over 5%, and European stocks dropped by a similar margin. Airline shares were among the biggest losers, with some carriers issuing profit warnings citing fuel cost explosions. UK and eurozone interest rate cut hopes collapsed, with bond markets entering their most turbulent period in years.