Brent crude has surged towards $106 a barrel as escalating fighting in the Middle East drives another sharp rise in global energy prices.
The international oil benchmark climbed to $105.66 a barrel, up $4.41, or 4.3%, on the day as markets reacted to growing concerns over key shipping routes around the Arabian Peninsula.
UK natural gas prices have also jumped sharply, with the front-month contract trading at its highest level since December 2022.
British gas briefly touched 207.2p per therm before easing slightly to around 206.81p, still up 4.6% on the session.
European gas markets followed the same direction, with the benchmark Dutch front-month contract rising 4.1% to €82.53 per megawatt hour.
The latest move in energy markets comes as Yemen’s Houthi rebels intensify efforts to take control of the country’s Red Sea coastline.
The group has claimed control of the strategically important port of Mocha, as fighting with the Saudi-backed government reaches its most serious level in years.
Control of a larger section of Yemen’s Red Sea coast would significantly increase concerns over the Bab al-Mandeb strait, one of the world’s most important maritime chokepoints.
That route is already under greater scrutiny because of continuing disruption around the Strait of Hormuz, on the opposite side of the Arabian peninsula.
Together, the two waterways are critical to the movement of oil, gas and other goods between the Middle East, Europe and Asia.
The prospect of further disruption to either route is increasing fears of tighter global energy supplies, helping drive Brent crude above $105 and UK gas prices to levels not seen for almost four years.
With both oil and gas prices rising sharply, investors are also likely to become increasingly concerned about the implications for inflation, transport costs, household energy bills and the outlook for interest rates.
