The risk of a gas crisis when Iran launches missiles at the US military base

Monday 23 June 2025 17:39
| Updated:

Monday 23 June 2025 18:02

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Iran has launched a series of missiles at the US military base in Qatar, in response to the American bombing attack during the weekend. City analysts have been highly careful about the potential for economic fall, with a warning that gas prices can be more than doubled if shipping through the Hormuz Strait is blocked.

Analysts are worried that the British economy can experience a guarantee effect of the surge in European gas prices if the Qatar tanker carrying liquid natural gas becomes stranded, with oil prices have increased to $ 79 per barrel on Monday afternoon.

Head of Capital Economic Economist David Oxley said oil prices could surge to around $ 150 if there was a closing strait of Hormuz while European gas prices could “surge” as high as 100 Euros per MWH, which would be equivalent to around £ 85/MWH.

Goldman Sachs analyst said prices could rise to a level that “triggered the destruction of large natural gas demand during the European Energy Crisis 2022” in a striking warning for the big economy throughout the world.

Every surge in gas prices is likely to cause higher inflation throughout the global economy, Peel Hunt’s Kallum Pickering shows, although it is not as severe as the price shock seen after the Russian invasion to Ukraine when the gas price skyrocketed over £ 100/MWH, triggered a sharp price increase.

“More than one fifth of global oil and gas flows through the Hormuz Strait – which is on the southern coast of Iran and only widened 21 miles at the narrowed point – and thus can be a decent target for Iran,” Pickering said.

“Iran’s efforts to attack or mine Strait will represent economic risk scenarios that are much worse, causing significant shocks and global prices, pressing global GDP and encouraging inflation.

“The central bank will have difficulty alleviating monetary policy aggressively in the decline scenario where the supply of oil and global gas is very disturbed and the surge in inflation.”

European gas prices depend on diplomatic efforts

A worrying projection will increase the bets of global diplomacy efforts to reduce conflict and persuade the highest leader Ali Khamanei to maintain the Strait of Hormuz off the southern coast of Iran open, with local parliament supporting steps to close the shipping path.

Donald Trump blamed traders for the surge of the new oil price as he said at the social post of truth: “You play right into the hands of the enemy. Don’t do that!”

He also seems to increase the likelihood of regime changes in Iran in conflict signs not close to subside in the short term.

British officials have begun evacuation flights for British citizens in Israel while others in Qatar have been warned to take refuge “until further notice”.

Qatar also closed the airspace for a while on Monday night because he was worried that the US military base would be hit by Iran.

Rachel Reeves said the government, who was told about Trump’s attack on Iran’s nuclear site on Sunday morning, supported the conflict partially conflict due to concerns about its impact on the British economy, with analysts who highlight the British economy remain exposed to gas price shocks.

“We have seen an increase in oil prices in the last few days and weeks, which of course will have an impact on the British economy. We recognize the challenges faced by business and families with energy costs,” he said.

“Of course, higher oil prices will have implications for the British economy. One of the reasons we want is de-escalation is to ensure that oil continues to flow and to ensure that the main route, both for oil and for broader trading, is open.”