Oil prices have risen to their highest level in more than two years, following a warning from Qatar's Energy Minister, Saad al-Kaabi, that all oil and gas exporters in the Gulf could stop production within days.
According to the Financial Times, al-Kaabi stated that the conflict in the Middle East could have severe global economic implications, potentially "bringing down the economies of the world".
Brent crude oil rose over 9% on Friday, reaching $93 a barrel, the highest level since autumn 2023, as reported by the Financial Times.
Impact on Global Economy
Rising oil prices can have far-reaching effects on the global economy, including increased costs for vehicle fuel, heating, food, and imported goods.
Analysts warn that if oil and gas prices remain high, it could fuel inflation in major world economies, such as the UK and US, where inflation has been on a downward trend.
Qatar's Energy Minister Warning
Al-Kaabi predicted that oil prices could hit $150 a barrel if the Iran conflict continues, stating that "everybody's energy price is going to go higher" and that there will be shortages of some products.
He also mentioned that a chain reaction of factories unable to supply goods could occur, as reported by the Financial Times.
Consumer Impact
Households in the UK are already experiencing higher petrol and diesel prices, and energy bills may also rise, although the impact may not be felt until July due to the energy price cap set by regulator Ofgem.
Analyst Jorge Leon from Rystad Energy told the BBC that the situation poses a "real risk to the global economy", and that the likelihood of significant implications for the energy system and global macroeconomic outlook increases if the crisis lasts more than two weeks.
Global Oil Supply
Qatar is a major producer and exporter of oil and liquefied natural gas (LNG), and the country's energy minister warned that all other energy exporters may have to stop production in the next few days if the war continues.
The Strait of Hormuz, a critical shipping route, has seen a significant reduction in traffic since the US-Israel war with Iran began, which could lead to higher oil prices and make goods and services more expensive globally.
