Oil prices surged more than 3% on Tuesday, pushing Brent crude to $78.66 a barrel, as military exchanges between the US and Iran in the Gulf disrupted supply expectations. The rise marks a near three-week high for the commodity, though Brent remains below the $80 threshold.
The escalation comes as the Organisation of the Petroleum Exporting Countries (Opec) cut its global oil demand growth forecast for this year to 780,000 barrels per day, its third consecutive downward revision. The cartel, led by Saudi Arabia, also raised its 2027 demand outlook, but maintained a more optimistic view than the International Energy Agency, which expects demand to decline in 2026.
UK petrol prices are expected to rise as a result of the crude rally. The FTSE 100 edged up 0.1%, supported by energy stocks including BP. Meanwhile, European shares posted modest gains, while Asian markets fell sharply, with South Korea’s Kospi dropping nearly 10%.
Gold prices slipped nearly 2% to $4,037 an ounce, and the pound weakened 0.17% against the dollar to $1.3381. US stock markets were mixed, with the S&P 500 down 0.2% and the Nasdaq falling 0.7%, while the Dow Jones added 0.4%.
