London, March 3, 2026, 15:48 (GMT)
- Global stocks dropped, with investors factoring in risks to energy supplies and the potential for rising transport costs.
- Oil and gas prices pushed higher, lifted by shipping disruptions along with stoppages in regional production.
- Expectations for rate cuts by central banks in both Britain and the United States were pushed back by traders.
Tuesday saw global equities and bonds tumble, rattled by a deepening U.S.-Israeli conflict with Iran. Oil and gas prices jumped, stoking fresh worries about another inflation jolt.
That’s important right now, with investors previously betting on spring interest-rate cuts after inflation eased. Higher fuel costs feed into prices for energy, transport, and groceries—and can slow growth, too.
Energy logistics is where the strain is showing up, with prices moving sharply.
London’s FTSE 100 skidded 2.6% to 10,501. Japan’s Nikkei gave up 3.1%. South Korea’s Kospi tumbled even harder, off 7.2%. UK month-ahead gas surged 30%, reaching 148 pence a therm. Yields on two-year UK government bonds climbed, up 13.5 basis points to add 0.135 percentage point. “They could be inflationary and disrupt plans to cut interest rates,” said Jemma Slingo, pensions and investment expert at Fidelity International. 1
The Dow, S&P 500, and Nasdaq all slid more than 2% out of the gate, as traders weighed the risk of inflation and trade disruptions. “The main concern is that oil prices goes to over $100 a barrel and stays there,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. 2
Brent crude futures jumped $5.70, or 7%, to $83.44 a barrel by 1326 GMT, after reaching as high as $85.12—the strongest level since July 2024. U.S. West Texas Intermediate (WTI) climbed $5.03, also 7%, trading at $76.26. Bernstein bumped its 2026 Brent forecast to $80, projecting that prices might surge as high as $120-$150 in a worst-case scenario. 3
For a fourth straight day, the Strait of Hormuz remained shut after Iranian forces struck five vessels, cutting off a corridor that moves roughly 20% of the world’s oil and LNG. Crude tanker passage dropped sharply—just four ships managed the route on March 1, compared to a daily average of 24 since January, according to Vortexa. Iraq has already dialed back production at key oil fields and warned that curbs could top three million bpd if exports keep stalling at the loading terminals. European gas prices spiked up to 40% before pulling back, while Oman’s Duqm port was hit by a drone and a fire at the Fujairah hub in the UAE disrupted refueling, the report noted. 4
The list of Gulf waters flagged as high risk by London’s marine insurers just got longer, with Bahrain, Djibouti, Kuwait, Oman, and Qatar now added, according to an advisory. As a result, war-risk premiums in the region have shot up fivefold over the past few days, bumping up costs for each shipment by several hundred thousand dollars. “The expanded designation … helps stabilise global supply chains by reducing uncertainty,” said Munro Anderson at Vessel Protect, a marine war insurance specialist. 5
Asian buyers snap up over 80% of Qatar’s LNG exports, and with the war grinding on, officials across multiple nations say they’re ready to shift to spot purchases if needed. Taiwan, where LNG fuels upwards of 40% of the island’s power and a third of that comes from Qatar, plans to lean more on U.S. supply and has already triggered its emergency protocols. “We will continue moving … obtaining sufficient quantities of energy through diversified markets,” said Taiwan Premier Cho Jung-tai. 6
U.S. rate markets dialed back the odds of a June Fed rate cut to roughly 35%, the month when Kevin Warsh—President Donald Trump’s nominee to replace Jerome Powell—would chair his first policy meeting. Over the past day, AAA reported a 10-cent surge in retail gasoline prices per gallon. Traders now put the likelihood of a July cut at just 55%. 7
John Williams, who heads the New York Fed, reiterated that more rate cuts remain possible if inflation pulls back, but skipped any mention of the Iran conflict during his prepared comments. “Monetary policy is currently well positioned to support the stabilization of the labor market and return inflation to our 2% goal,” Williams said. 8
Markets are jumping at every headline. If shipping lanes reopen or attacks stop, energy prices could drop quickly—rate-cut speculation might flare back up. But if key exporters stay offline for longer, expect the reverse impact.
Traders, for the moment, are eyeing how quickly producers might shift supply routes—and if governments will intervene to keep fuel prices in check. Volatility looks like the default setting.
