The brief sigh of relief on the world markets barely lasted a day. Brent crude rose sharply back toward $100 a barrel on Thursday after Iran closed the Strait of Hormuz, a clear signal that the Middle East’s fragile ceasefire was already at risk of breaking.
The benchmark was trading at $98.61 a barrel in early afternoon trading, up 4 percent, after falling as much as 16 percent to below $91 a day earlier, on optimism that a two-week pause in hostilities could pave the way for lasting peace. This optimism now seems completely misplaced.
Iran’s decision to close the strait, through which about a fifth of the world’s oil and gas flows, was a direct response to Israeli airstrikes on Hezbollah targets in Lebanon, which Tehran condemned as a violation of the ceasefire agreement. It’s a move that goes to the heart of global energy security and will worry policymakers and business leaders alike.
Sultan Al Jaber, CEO of the state oil company Adnoc in Abu Dhabi, did not mince his words. He made clear that Iran was using passage through the waterway as political leverage rather than respecting freedom of navigation, a distinction that is hugely important for companies that rely on uninterrupted supply chains.
Nigel Green, chief executive of financial advisory group deVere, shared these concerns, pointing out that a fifth of the world’s oil supply continues to flow through a corridor that is actually controlled by one of the belligerents. This is an extremely unpleasant situation for SMEs that are already struggling with increased energy costs.
The stock markets reflected the poor mood. The FTSE 100, which had its strongest single session since April 2025 with a gain of 2.5 percent on Wednesday, gave back 0.2 percent to trade at 10,585. On the continent, the German DAX lost 1.4 percent and the French CAC 40 lost 0.7 percent. Across Asia, Japan’s Nikkei, South Korea’s Kospi and China’s SSE Composite all closed lower.
Wall Street, which had rallied sharply overnight with the S&P 500 up 2.5 percent and the Dow Jones up nearly 3 percent, was expected to start in the red.
President Trump spoke out on social media, confirming that American forces would remain stationed in the Gulf until an agreement was reached and adhered to, and warned of serious consequences if it was not.
Meanwhile, Israel stepped up its military operation in Lebanon with its worst attacks since the escalation of conflict with the Iran-backed Hezbollah militia last month, reportedly killing more than 250 people.
For UK businesses, particularly in manufacturing, logistics and all sectors affected by energy prices, the message is clear. The ceasefire may have provided a temporary reprieve, but the underlying volatility in the Middle East and its direct impact on the cost of doing business is far from resolved. With Brent prices hovering near triple digits, boardrooms across the country will be rethinking their hedging strategies and bracing for a potentially extended period of uncertainty.
