Name: Oil prices still volatile over fears Iran war may drag on | BBC News
Uploaded: 2026-03-05T21:49:19.000Z
Duration: 9 min 38 s
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Well, let's get the latest business news now.

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Sally, oil prices have gone up again and that's because people are worried about what's happening in the Middle East.

We're getting reports that there's a tanker on fire near the Strait of Hormuz today.

We're getting more news on day six of this conflict with oil prices spiking again today after they stabilized on Wednesday.

This on renewed fears about longer term disruption to global supply of energy.

So the focus for, for global markets and business is of course, that narrow stretch of water at the end of the Arabian Gulf, the Strait of Hormuz.

On Wednesday, Iran's Revolutionary Guards said they have complete control over the vital waterway, the shipping route for 20% of the world's oil.

Well, a short time ago, the Iranian Revolutionary Guards claimed that they had attacked a US Oil tanker in the Persian Gulf some hundreds of kilometers north of the strait.

And an attack that we have yet to verify.

Earlier this week, President Trump promised to use navy ships to protect those going through that strait and provide insurance even.

This is the time lapse of traffic levels in the strait.

Now this is just before the war began on Saturday.

To give you a sense of how busy it was, around 80 ships would pass through daily.

That traffic has all but halted with just a couple of ships passing through on Wednesday.

So some 329 oil vessels are now stuck in the Gulf according to investment bank JP Morgan.

With Iraq slashing crude production as it has no way of exporting at the moment.

So today earlier we saw the price of Brent up sharply.

It's currently up around 3%, trading just below $84 a barrel now just off the level it hit when the war began.

The head of the International Maritime Organization has been speaking to the BBC and warned the effects on shipping will be felt all over the world, not just in the Middle East.

What we're experiencing right now is that insurers are actually cancelling the insurance coverage or elevating the prices to astronomical levels when it comes to war coverage.

Of course, all these will hamper the operations and in general will create additional strength and into the economy of the world.

So this will pass on the cost from one side to the other.

This is something that has a global ramification.

It's not just what is happening in the Strait of Hormuz.

Well, the U.S. energy secretary has told Fox News the U.S.

navy will start to escort oil tankers through the strait as soon as it can, but

they're currently focused on other things.

Bob McNally, who's a former energy adviser to President George W.

Bush and frequently testifies to Congress on energy issues, told us that that securing the Strait of Hormuz is far from simple.

I think the US Military can make the strait safe again, however, not as quickly as I think market participants and investors would expect or want.

I think it's going to be a matter of weeks, not hours or days.

And the real issue is not insurance per se.

It is suppressing Iran's ability to to make it unsafe for boats to go through that strait.

Iran has a lot of small, asymmetric, layered types of munitions that are hard to find and kill fast.

And the US Military I think is going to start prioritizing those as soon as it achieves air superiority.

Well, the effects are already being felt in the US with prices at the pumps rising as refiners face higher crude costs.

The average cost of a gallon of regular Gasoline hit almost $3.20 on Wednesday, according to the American Automobile association, up more than 30 cents on a month ago.

Diesel has seen its biggest jump since the Ukraine invasion, a gallon of Diesel averaging over $4 for the first time in nearly two years.

Diesel, of course, is used by truckers and farmers, so higher costs feed into the price of food and other goods.

Jamie Brito is executive director for refining and oil products at Chemical Operations Market analytics by Opus.

I asked him about whether these higher oil prices are being fed felt throughout the US Economy.

Immediately after the attacks took place on Saturday, some retail station chains in the US Were already adjusting their prices for the consumer on Sunday.

You need to see that vessel that is not coming to the U.S.

gulf coast four or five, six weeks from Saturday night.

You're supposed to wait for the supply chain to actually trickle down.

But in modern times when you have instant information marginology companies adjust their prices based on what they expect inventories are going to do in the next few weeks.

I mean Jamie, we're just reading now coming through on the wires that, you know, Singapore jet fuel, the prices have hit an all time high as global supplies are, you know, concerns about restraints going forward.

Do you see higher oil prices for some time to come and if so, what, what impact will that have on this war and Trump's strategy?

It is all a function of the time it takes for Any normalization of flows through Hormuz.

Of course, if you have, you know, one, two weeks lingering, then for sure it will have a gradual upside impact on prices.

And the grab spreads or the prices on refined fuels from gasoline, diesel, jet fuel are usually more volatile.

In the case specifically of jet fuel, inventories are more scattered, are lower than what you have normally for gasoline or diesel.

So we would expect to see significant impacts on the aviation sector.

And for sure we were going to see higher crude prices in the next couple of weeks.

If Americans are paying high prices at the pump, that will cause a change, do you think, in terms of the seasonality of prices?

We are crude prices and gasoline prices were not supposed to increase until maybe the end of June towards the driving season.

So what I'm saying is that this, this time is kind of a seasonal low demand moment.

So that quote unquote is kind of a fortunate event for this development in terms of timing.

But yeah, for sure, for instance, if a US consumer is paying 40, 50% higher prices for the next couple of weeks, this definitely will have a political price.

Well, I also talked to, to John Solve that, who is head of Middle east and North Africa at the Global Risk Consultants, Varysk Maplecroft.

I asked him what he's advising his clients about risk at the moment.

Well, I think the first point is that, you know, the, the impact of this around the world, as we've just heard, is very extensive.

And really the key message that we're telling our clients is that the longer this conflict continues along this, the same pattern that we've seen so far, you know, the bigger the ramifications.

And there's really a twofold challenge here.

And a lot of this just boils down to essentially Iran's response to US and Israeli military operations.

What we're seeing, of course, is that Iran is trying to impose a heavy an economic cost as possible on the US and on Israel and on the global economy.

And what we're seeing specifically is, you know, drone and missile strikes.

And there's really a twofold challenge to that one.

As we've just heard, the threat to shipping has meant that the flow of ships to and from the Persian Gulf has pretty much ground to a halt.

And then secondly, we're seeing direct hits against very critical energy infrastructure, ports, industrial facilities.

So these two things combined is really what is halting the flow of critical commodities from the region, things like oil and gas, but

also other industrial chemicals, fertilizers.

So it's a very long list of commodities that is being directly affected by that and that is trickling down throughout the global economy.

When the US Says, you know, we're going to provide protection to shipping and even, and

even insurance, what's your take on that?

Because many are questioning how that would work on a, on a practical level and whether that will really change the minds of, of the big companies that would use their this route to ship their goods.

And the key question at the moment is, you know, details for the, for these proposals.

I think given the current crisis, any kind of proposed solutions are very much welcome.

But time is very much of the essence here and it's very unclear how these two proposals are going to work.

And even if we were to move towards some sort of resolution, if we were to start to see a reduction in Iran's ability to launch missiles and drones, getting back to normal is going to take longer than what we've seen already.