Recent military tensions involving the US, Israel and Iran have really impacted oil markets, according to reporting from Sky News, Reuters, the IEA and the U.S. EIA in analysis from Right Fuel Card.
The Middle East accounts for a large share of global oil output and controls critical shipping lanes such as the Strait of Hormuz, through which about 20% of the world’s seaborne crude oil travels each day.
Crude prices have come up in early trading this week. Brent crude, the benchmark that sets the price for most UK fuel, rose on fears about supply risks. Analysts quoted by Bloomberg, the Financial Times and the IEA say prices could reach $90 to $100 per barrel in the near term if supply routes are constrained.
Oil markets react to threats as well as actual shortages. Traders add a risk premium to futures contracts during periods of uncertainty. That feeds into wholesale fuel prices and then into petrol and diesel forecourts, usually within 10 to 14 days.
Right Fuel Card says even a 5 pence per litre increase can add more than £400 a month to the fuel bill of a 25 van fleet. For larger fleets the cost rises further, squeezing operating margins across logistics, construction and retail.
What Does Volatility Mean For Business Planning?
Samuel Leach, founder of Samuel and Co Trading, said, “The current geopolitical instability in the Middle East is not just a regional issue, it is a volatility catalyst for global markets. Oil, gold, shipping routes, and the US dollar sit at the centre of this equation. When conflict escalates, markets don’t wait for clarity; they reprice immediately.”
He added, “The key for businesses is not to try to predict outcomes, but to prepare for sustained instability.”
Leach said, “Access to capital tightens during uncertainty. Those with strong cash positions maintain negotiating power.” He also said, “Inflationary shocks from energy or shipping disruptions often feed directly into operating costs. Businesses must be proactive in communicating pricing adjustments rather than absorbing margin compression silently.”
On preparation, he said, “No one can control geopolitical escalation. But companies can control leverage, liquidity, exposure, and operational flexibility.” He added, “The biggest mistake businesses make during uncertain periods is paralysis. The winners are those who move from prediction to preparation.” He said, “Volatility does not destroy value indiscriminately, it transfers it. Businesses with disciplined risk management and strategic foresight can emerge stronger while competitors struggle.” He concluded, “In uncertain times, resilience becomes a competitive advantage.”
Are Metals Markets Adding To Cost Related Issues?
CreditSights reports that the conflict in Iran is influencing metals markets. Spot gold averaged $5,400 per ounce on March 1, a day after US and Israeli attacks in Iran, as investors moved into safe haven assets.
Aluminium prices have risen 3% to $3,230 per tonne. The Middle East accounts for 8% to 10% of global primary aluminium output each year, and Gulf producers rely heavily on maritime routes through the Strait of Hormuz, which has been shut to traffic as a result of the conflict.
CreditSights said, “While this can support metal prices through higher marginal cost curves, it also raises the risk of demand moderation if elevated energy prices slow growth in key consuming regions.”
The UK manufacturers that use aluminium or other energy intensive inputs, higher oil and gas prices feed into production costs. Mining, refining and smelting all consume large amounts of energy, which means inflationary pressure can impact so many industries from crude oil into finished goods.
How Can UK Businesses Prepare For Such Uncertainties?
So, how can businesses prepare for situations like this? Experts share:
Our Experts:
- Sam Coyne, CEO, Europe, Currenxie
- Arie Brish, St Edwards University
- Paul Holland, Managing Director, UK/ANZ Fleet, Corpay
- Eliot Bassett, FX Specialist and MD, Lumon Corporate
- Tony Pelli, Practice Director, Supply Chain Security and Resilience, BSI
- Dr. Andreas Sichert, Founder and CEO, Orcan Energy
Sam Coyne, CEO, Europe, Currenxie
“Rising oil prices might grab the headlines but escalation across the Middle East will result in price hikes across all industry supply chains. The crippling of key trade routes will prolong uncertainty and continue to drive up supply costs, squeezing merchant margins ever further and ultimately leading to a spike in the cost of consumer goods and surging inflation.
“Recent research from the Chartered Institute of Procurement and Supply (CIPS) recently warned that due to rising costs of transport, energy and raw materials, consumer goods prices could soar during 2026. The events over the weekend are likely to make such forecasts inevitable and global businesses and consumers will rightly be hugely concerned of the longer-term impact on supply chain costs and the price of products on the shelves.
“As businesses face rising costs, they are presented with an ever-greater challenge to remain competitive and drive growth. The ability to be agile and enter new markets – whether that is to source new suppliers or expand the customer base – is key to growth, however many SME retailers face high costs when dealing with global payments. In some cases the only option is to pass on these increased costs to the end consumer, however, this is likely to hit revenues.
“For those businesses operating internationally, multi-region treasury management, reliable settlement times, and FX risk and margin management are critical – traditional bank services aren’t built for international SMEs and offer higher costs and slower processing times, these businesses need to ensure they have access to secure, fast and cost-effective cross-border payments and local market expertise if they are to continue to compete and fuel growth.”
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Arie Brish, St Edwards University
“The time to prepare for a crisis is when you see the early warning signals… If you wait until it really happens it is too late .. As far as the current conflict in the Middle East – this was on the horizons for long time. In any case, The current ecosystem is a moving target .. The best way to “prepare” is diversification.
“Diversify your supply chain .. Diversify your customers base .. Diversify your product portfolio .. Even diversify your workforce among few regions in the world ..
“As far as investment goes, once again, with this conflict on the horizons good sectors have been military and energy .. Other safe sectors could be health .. Gold has been a mitigation route, probably still is ,… Other than that, just diversify-diversify-diversify.”
Paul Holland, Managing Director, UK/ANZ Fleet, Corpay
“The sharp move in oil markets over the weekend is a clear reminder of how quickly fuel costs can turn. Brent crude briefly jumped into the low $80s after the latest escalation in the Middle East, with the risk premium now firmly back in the price.”
“For UK fleets, the key issue is not just whether pump prices rise, but how volatile they may become in the weeks ahead. We know that even short-term disruption around the Strait of Hormuz, which carries around a fifth of global oil supply, can ripple through wholesale markets very quickly.”
“What fleet operators are telling us is simple. They want tighter visibility and more control when markets move like this. Small swings at the pump add up fast across a large vehicle base.”
“The next step for many businesses is practical. Monitor fuel data closely, review purchasing behaviour and make sure policies are doing the job. In periods like this, the organisations that stay closest to their fuel data are usually the ones that manage the cost shock best.”
Eliot Bassett, FX Specialist and MD, Lumon Corporate
“Whilst business rates remain a growing concern as revenue growth moderates, the conflict in the Middle East is adding further instability to global markets. Supply chain disruptions, commodity shocks, and shifting trade alliances are fuelling currency volatility, which can rapidly compress margins for any business reliant on imports – all having a ripple effect down to the consumer.
“Businesses can and should build resilience against these geopolitical headwinds through currency hedging. By adopting a layered approach of smaller, regular hedges, businesses can reduce timing risk, which is needed in a volatile time such as this.”
Tony Pelli, Practice Director, Supply Chain Security and Resilience, BSI
“We are recommending that clients work with their logistics partners to understand the exact impact of delays and disruptions, including alternate routings and amount of time delays can add, and adjust their lead times accordingly. From there, organisations can look up and down their supply chains to understand the potential impact on production schedules and future production for suppliers.
“In addition, companies should evaluate whether buffer stock that they keep in the supply chain is sufficient and for how long that can help them weather the disruption. For organisations operating in region, we are recommending that they activate relevant business continuity plans, continue to review them as the situation changes, and provide clear and frequent communication to personnel and suppliers in the region.”
Dr. Andreas Sichert, Founder and CEO, Orcan Energy
“The unpredictable availability and pricing of commodities like natural gas are fracturing traditional power procurement, translating global supply uncertainty directly into escalating costs. To build true operational resilience, the industry must pivot toward radical energy efficiency and circularity. Maximising every molecule of gas through on-site waste heat recovery is one way to decouple future capacity growth from fragile commodity markets.”
