G7 to Hold Emergency Meeting on Oil as Markets Sink Over Iran War

G7 nations will hold an emergency meeting on Monday to address surging oil prices, as global stock markets slump amid fears that the escalating US-Israeli war with Iran could cause prolonged energy supply disruptions.

Finance ministers from leading industrialised countries, including UK Chancellor Rachel Reeves, are expected to discuss a coordinated release of petroleum reserves through the International Energy Agency—a move last taken following Russia's invasion of Ukraine in 2022.

Brent crude prices briefly touched $119.50 a barrel on Monday morning, marking a 25% surge, before settling around $107. UK gas prices for month-ahead delivery jumped nearly 25% at market open. The FTSE 100 fell 1.5%, while European markets, including Germany's Dax and France's Cac 40, dropped about 2.5%.

Asian markets suffered heavier losses, with Japan's Nikkei 225 falling 5.2% and South Korea's Kospi plunging 6%, triggering circuit breakers to halt trading. Oil giants BP and Shell were among the few companies to see share price increases.

The price surge follows the near-halting of traffic through the Strait of Hormuz, through which approximately one-fifth of global oil supply typically passes daily. Over the weekend, Iran targeted energy infrastructure in Gulf states, while US and Israeli airstrikes hit Iranian oil depots.

For UK consumers, rising oil prices are expected to push petrol costs higher—the RAC reported average petrol prices at 137p per litre, up nearly 4p since the conflict began. Analysts warn the situation could derail the UK's path back to the 2% inflation target, potentially impacting interest rate decisions.

US President Donald Trump dismissed concerns, posting that oil prices "will drop rapidly when the destruction of the Iran nuclear threat is over."