Oil prices - what will happen if Iran blocks the Strait of Hormuz?
It is the clearest signal yet that instability in the Middle East will spill over, after Israel's bombardments on Iran – bolstered by US airstrikes on three nuclear sites – entered a second week.
A third of the world's oil is derived from the region, with Saudi Arabia, Iran, Iraq, the UAE, Kuwait, and Qatar being the biggest fossil fuel suppliers, so any disruption will, of course, shake up the market.
Fears are also rising that the Islamic Regime could follow through on their promise to close the Strait of Hormuz – the most strategic oil chokepoint in the world.
And if things get uglier, security experts have told Metro that the oil could jump from the current price of $78.96 per barrel to as much as $120 in a 'worst-case scenario'.
What is striking – and somewhat ironic – is that just 24 hours after the US hit Iran's nuclear assets, Washington is now urging China to pressure Iran to keep the 103-mile stretch of ocean open…
Oil prices surged to a five-month high as investors wait to see if Iran would retaliate against the US attacks on its nuclear sites.
A barrel of Brent crude oil – the benchmark price – jumped by around 1.53% to $78.19 a barrel as of around 7.15 CEST, while WTI rose 1.48% to $74.93 a barrel.
It is worth remembering that this is around the average price for 2024, but with Israel's war only escalating, this may not be the end of it.
No oil sites have actually been struck in Iran, so the market is calmer than expected.
That said, if the Islamic Regime's Supreme National Security Council does approve of the closure of the Strait of Hormuz, the oil price will jump even higher.
Yet for now, there is 'no hint of disruption', said Javier Blas, Bloomberg's energy and commodities columnist.
He said: 'Multiple oil tankers crossing the Strait of Hormuz this morning, both in and outbound. Not even a hint of disruption.
'Oil loading across multiple ports in the Persian Gulf appears normal. If anything, export rates over the last week are higher than earlier in June.'
Closing the Strait of Hormuz would have 'the most profound impact' on the global oil price and the stock market since the Iraq War.
Jason Pack, fellow at Royal United Services Institute (RUSI) and host of the Disorder Podcast, told Metro that it would be 'such a committal step' for Iran that it would indicate which way the war is going.
He said: 'There are many reasons why the Iranians would not want to close it. For one, they would not be able to make any money from their oil.
'Their allies, particularly China, would not want that. China is dependent on Iranian oil and their economy is already suffering.'
Closing the Strait of Hormuz also does not happen automatically – there is no barrier or another contraption to physically stop the passing of ships. More Trending
Instead, Pack explained that Iran would plant underwater mines or attack a tanker, for example, to signal it.
This would also force insurance premiums for vessels to 'go through the roof.'
He added: 'This would then cause oil to have to be taken on pipelines and trucks to the Mediterranean, and that would cause tremendous delays, and a lot of oil will not be produced as there are not enough storage facilities.
'So there would be a huge price hit and the markets would go crazy.'
Get in touch with our news team by emailing us at webnews@metro.co.uk.
For more stories like this, check our news page.
MORE: Is it safe to travel to Qatar? Latest after cancelled Doha flights from UK
MORE: Is it safe to travel to Turkey? Latest Foreign Office tourist advice after US strikes on Iran
MORE: El Al airline announces rescue flights from Israel to London
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
an hour ago
- Telegraph
‘I want a bigger home but it no longer makes financial sense to extend it'
Have you given up on your extension dream? Get in touch to tell us about it money@ * When Gus Zogolovich designed his family home, he had just one child. By the time it was built and ready for him and his partner to move in, a second baby was on the way. They are now a family of five – and the house is beginning to feel decidedly cramped. Zogolovich, an architect and managing director of boutique development company Unboxed Homes, has been toying with the idea of extending the house in Queen's Park, Brent. But the numbers just don't make sense. Familiar with the process, Zogolovich's first step was to discuss his ideas with planning officers at Brent Council. However, he left with the impression that while an extension might in theory be acceptable, their preference would be for something small – around 100sq ft to 150sq ft in total. The problem is that the cost of building materials has increased exponentially since the start of the pandemic, resulting in a wholesale collapse in the number of homeowners upsizing their properties. In the year to March 2025, English councils received just over 150,000 applications according to research by estate agent Savills – down 8pc compared to the previous year, 27pc below the 10-year average, and the lowest number in a decade. For Zogolovich the hurdle is not simply the escalating cost of building materials and labour, but the many things he will need to pay for during the course of the building work. Everything from party wall agreements with the neighbours, to planning consultants and scaffolding (which can cost up to £1,000 a week according to Checkatrade) – will cost the same, no matter how big or small the extension. The planning application alone would set him back £613. A small extension could therefore end up costing him around £200,000 or £2,000 per sq ft. 'It just won't make any sense,' he says. 'If it costs £200,000 to build and only adds 100 sq ft, it's not justified.' Gallingly, before the pandemic Zogolovich estimates that a similar project would have cost him around half the price. Amit Patel, head of construction at the Royal Institution of Chartered Surveyors (RICS), blames Zogolovich's predicament on wide-ranging inflation on many different building costs. 'Planning application fees have gone up by 100pc in some boroughs, supply chain disruptions mean materials are more expensive – things like bricks and plaster have increased by 20-25pc, steel has doubled. Energy prices have gone up as we all know, and there has been an outflux of foreign labour, which has left a gaping hole,' he says. 'Trades are charging double what they used to.' He concurs with Zogolovich that home improvers need to budget around £2,000 per sq ft for a home extension – which means they can only break even in high-value locations. To make matters worse, with house prices growing slowly – if at all – the days of relying on underlying price increases to help justify the cost of a project are long gone. Zogolovich can no longer defend the extension based on the property value uplift he would have likely achieved before the pandemic. According to Rightmove UK, asking prices fell by 1.2pc in July alone, the biggest drop it has recorded since it began monitoring the housing market in 2001. 'It used to be cheaper to do an extension than move, and you could add value too, but that is not the case any more,' agrees Patel. 'People are doing a cost-benefit analysis and realising that it might just be cheaper to move, because house prices are very static and they are not going to make a return.' Savills found that not only are planning applications plummeting, the number of more modest projects being undertaken using permitted development rights (PDR) – which allow some homeowners to build small extensions and convert lofts without planning permission – are also falling. In the first quarter of this year there were almost 11,000 successful applications for PDR. Five years ago, there were almost 17,000 successful applications. Beyond the surging cost of building materials, Nick Willson, of Nick Willson Architects, reports that labour costs have soared thanks to tax changes like April's increase in employer's National Insurance contributions from 13.8pc to 15pc, and the shortage of skilled tradespeople from Eastern Europe post-Brexit. As a result, says Willson, he would expect an experienced bricklayer, joiner, electrician or plumber to charge around £400 per day in London. On top of this, building regulations have become stricter, with a greater emphasis on energy efficiency and sustainability. This often requires the use of renewable energy and high levels of insulation, again which add to bottom line costs. Checkatrade estimates that the average basic extension in the UK costs £48,000 going all the way up to over £120,000 for larger, more high-end works. However, the site caveats the figures, adding that these prices are ballpark averages and the costs for extension works vary significantly, depending both on the location, size of the property and the extent of the project. Homeowners 'stuck in pre-2020 costs' Matt McKenna, of Architecture for London, says another aspect of the problem is that homeowners are living in the past, and come into the process over-optimistic about budgets. 'I get the feeling people are still a bit stuck in pre-2020 costs, maybe with projects they paused and are now revisiting, but without reviewing budgets, sometimes taking anecdotal budgets from friends who have done 'recent' extensions that were before the pandemic. Those are now six years ago, not six months ago.' McKenna's firm estimates that a single-storey extension in London will usually cost between £2,500 and £4,000 per sq ft. These costs are then increased by up to 60pc for a two-storey extension. Kate Claire, of Loud Architects, faces the same kind of financial nostalgia when discussing work with new clients. 'There is no such thing as a £60,000 loft conversion any more,' she says. Resi, a home conversion platform, puts the average price of a loft conversion at £60,000 to £130,000 in London and £50,000 to £80,000 outside the capital. However, while there is additional cost, the more expensive the location the more it makes financial sense to build – as you will be adding more value to the property in London than in a cheaper location. Contractors are taking advantage Claire believes that homeowners may be paying an additional cost for their lack of industry knowledge. Some building materials have come down in price since the supply-chain crisis peaked during the early pandemic, but many contractors have not reduced their prices. They are able to take advantage of the fact most civilians have absolutely no idea how much a brick or a square meter of insulation actually costs. She also despairs about the planning system, which builds endless delays into carrying out work. 'The planning system is just broken,' she says. 'Councils are extremely strapped for staff, there are long backlogs if you want pre-application advice, and some councils are even using people who are based overseas – as far afield as Australia in some cases – and the time difference adds to the delays. 'We have so many applications just waiting to be registered, let alone decided.' Another spanner in the renovation wheel is higher borrowing costs for those who intend to remortgage to fund their project. 'Ultimately if a project is funded by borrowing, then it makes the overall cost higher,' says McKenna. Patel believes that if the current situation persists, the only people who will spend on extending their homes are the extremely lucky few for whom money is no object and those who plan to remain in their new homes indefinitely, giving them a chance of recouping what they spend. 'Other people will be more likely to do up their bathrooms or kitchens, or spend more on their gardens, because it costs less,' says Patel. For Zogolovich in Brent, the next step is testing the waters by taking pre-application advice on whether a 250sq ft extension might be acceptable. 'If that fails, we may have to sell up or wait until the kids move out,' he says.
Metro
2 hours ago
- Metro
Can you spot what David Lammy is doing wrong in this picture?
It's not every day that you see two senior politicians getting their rods out. But that's exactly what Foreign Secretary David Lammy and US Vice President did during JD Vance's three day flying visit to the UK this week. The Vances based themselves at Dean Manor in the tiny settlement of Dean, not far from David Cameron's digs in Chipping Norton, in the Cotswolds. While visiting Lammy at Chevening House, in Kent, the two decided to take up a spot of fishing together. Harmless, right? Apparently not. Lammy has now referred himself to the environment watchdog because he failed to obtain rod licences for the pair to go fishing. Anglers in England and Wales aged 13 or over must have a rod licence to fish for freshwater species, such as carp, according to the Environment Agency. But fish lovers, have no fear – all the fish that were caught were returned to the private lake, the PA news agency reported. Hello, I'm Craig Munro and I'm Metro's man in Westminster. Every Wednesday, I write our Alright, Gov? newsletter with insights from behind the scenes in the Houses of Parliament – and how the decisions made there will end up affecting you. There's plenty to cover this week: JD Vance's trip around the UK, Friday's Russia-Ukraine summit, the government's new guidance on releasing ethnicities of people accused of serious crimes and the rollout of police vans with facial recognition. Click here to sign up ahead of today's newsletter at 5.30pm 'The Foreign Secretary has written to the Environment Agency over an administrative oversight that meant the appropriate licences had not been acquired for fishing on a private lake as part of a diplomatic engagement at Chevening House last week,' a Foreign Office spokesperson said. 'As soon as the Foreign Secretary was made aware of the administrative error, he successfully purchased the relevant rod fishing licences. 'He also wrote to the Environment Agency notifying them of the error, demonstrating how it would be rectified, and thanking them for their work protecting Britain's fisheries.' During the visit, Vance described Lammy as a 'good friend' and a 'very, very gracious host'. More Trending The vice president added: 'Unfortunately, the one strain on the special relationship is that all of my kids caught fish, but the Foreign Secretary did not.' All fish that were caught were returned to the private lake, the PA news agency understands. An Environment Agency spokesperson said: 'Everyone who goes fishing needs a licence to help improve our rivers, lakes and the sport anglers love. 'We understand the relevant licences have been purchased.' Get in touch with our news team by emailing us at webnews@ For more stories like this, check our news page. MORE: Russia 'responsible for hacking highly sensitive US court records' MORE: White House reveals why Zelensky won't be at Trump's one-on-one with Putin MORE: Donald Trump says he's 'going to Russia' to meet Putin – when it's actually in Alaska
Metro
10 hours ago
- Metro
I don't want to buy a home — and it's nothing to do with money
When 24-year-old Piper Phillips moved to New York City, she knew one thing would be true: she wouldn't be buying a home. At the moment, Piper doesn't have any desire to get on the property ladder in the Big Apple. She's largely accepted that, for the career opportunities it affords her, she's happy to foot the bill to live in a prime location. 'Homeownership is the American Dream, and it's been shoved down our throats for as long as we can remember,' Piper, a full-time content creator and digital entrepreneur, tells Metro, noting that her priorities are her 'career' and 'lifestyle.' At the moment, Piper and her boyfriend live in a one-bedroom flat in Manhattan. It costs them $5,000 (£3,727.42), with Piper contributing $2,000 (£1,490.97) towards the monthly payment. And while the couple are now looking for a two-bedroom apartment so that she can have her own home office, and have increased their budget to do so, they're not looking to buy. 'I'm paying for my life in New York City, and that's worth it because I enjoy it. The high rent in NYC is your membership you use to be able to live in the city that has the best opportunities for your career in the world,' she adds. You can access completely fee-free mortgage advice with London & Country (L&C) Mortgages, a partner of Metro. Customers benefit from: – Award winning service from the UK's leading mortgage broker – Expert advisors on hand 7 days a week – Access to 1000s of mortgage deals from across the market Unlike many mortgage brokers, L&C won't charge you a fee for their advice. Find out how much you could borrow online Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage. Piper also loves the 'freedom' of being able to try out new places, in a similar way that many young Londoners do, too. 'Living in New York is so fun, you get to explore new neighbourhoods and that really just marks different chapters of your life,' she reflects. 'I do love the fresh energy of coming into a new place. When my toilet breaks or something happens, I just call my repair person, and they come and fix it for me. It's incredible.' She feels that there's a hidden luxury to renting, as she wouldn't be able to afford to buy the type of home she's living in. In fact, she'd rather just rent and 'not deal with the hassle.' 'I don't think that homeownership is the same badge of approval or stamp of success as it was once was,' she says. 'It used to mean that you were stable, but rent is so expensive in these metropolitan cities, it is more glamorous and sometimes, it's equally as impressive to live where you want, even if you're renting.' This isn't just an NYC thing: many in the UK have similar sentiments. While her friends around her rush to get on the property ladder, 25-year-old Kathryn Loosley still isn't convinced. Kathryn loves her life in London, and though she's currently paying £1,100 for her room in Tooting, she's not sure if buying is entirely worth it. 'My boyfriend and I want the freedom to move around. We'll really need to think hard about whether it's worth it or not,' Kathryn tells Metro, noting that seeing her peers struggles to buy have put her off. Kathryn says that renting currently affords her a decent amount of disposable income, which gives her the freedom to enjoy her lifestyle 'without feeling the financial burden of homeownership,' something she feels is important for 20-somethings. 'We're tied into rent as you would be with a mortgage, but we don't have any overheads in repairs. We know what's going out each month and can allocate the rest to enjoying London, whether that's eating out, fitness classes, or escaping for a European weekend break,' she adds. 'I'm so happy we're not being tied into a house at this age.' According to a survey conducted by SpareRoom in March 2025, while 62% of under-30s expect that they will buy a property at some point in their lives, 11% don't think they will. And, amid the uncertainty – and inaccessibility – of the housing market, 28% are unsure either way. For much of the younger generations, plain 'hard work' isn't enough anymore. While grandparents recall stories of saving up for a house relatively quickly, prospective homeowners these days are often having to rely on the Bank of Mum and Dad, a privilege that those from working-class families often cannot access. Breaking from the debate entirely, though, is a group of people who, like Kathryn, don't want to buy a home at all and refuse to buy into the idea that homeownership is the ultimate housing goal. Of those who feel they won't ever get on the property ladder, SpareRoom's findings showed that 11% actively said that they prefer renting, while 15% need the flexibility to move at short notice, So, why is the UK so obsessed with the holy grail of homeownership in the first place? In 2021, one YouGov study suggested that owning isn't universally valued globally. While 62% of Britons said that it was a goal they'd already accomplished, it was hardly a number one priority in places like Germany, where housing policy has often encouraged people to rent. Here, two in five (42%) had no intention of buying at all. Dr Marc Schelhase, a lecturer in the Defence Studies Department at King's College London, explains that the British fixation on home ownership is actually a relatively recent development. After the Second World War, government housing policy focused on universal access to quality housing where communities could thrive – seen in the vision of the prefab homes, many of which were given as social housing to returning soldiers. Then came Right to Buy under Margaret Thatcher in the 1980s, which saw tenants in social housing encouraged to buy their own homes. And of course, the many challenges of the UK rental system have some people desperate avoid landlords. The Renters' Rights Bill is designed to make things better for tenants, but it's been in the works for years and won't become law until 2026. Focusing on ownership isn't always a helpful mindset though, as it can distract from the government's responsibility to build and maintain social housing – and potentially underplay the idea that some renters might just not be interested in buying. We just need a fair rental market that works. As Marc von Grundherr, director of Benham and Reeves, tells Metro, it's an increasing trend we're seeing in renters – and it's not just Gen Z, but a number of demographics. More Trending 'Flexibility has become a significant priority, with many choosing to rent as it offers the freedom to relocate for career opportunities or personal reasons without the commitment and potential restrictions that come with owning a property,' Marc shares. And while getting on the property ladder is generally interpreted as a positive financial commitment, Marc feels that not everyone sees it that way. 'With the cost of living, inflation, and the unpredictability of the housing market, some see renting as a way to maintain financial fluidity and avoid long-term debt,' he concludes. 'This trend isn't restricted to younger generations either; we're seeing it across a range of age groups, from professionals who value mobility, to those nearing retirement, who want to avoid the financial burdens that often accompany homeownership.' Do you have a story to share? Get in touch by emailing MetroLifestyleTeam@ View More » MORE: Londoners are flocking to my beloved hometown — but there's one problem MORE: What I Own: We paid £125,000 for our London houseboat — we charge our lodger £1,200 a month MORE: MPs being landlords would be comical if it wasn't so offensive
