2nd June 2026
CNBC has reported in that Iranian negotiators will stop exchanging messages with the U.S. through intermediaries, and Tehran will move to fully close the Strait of Hormuz, in retaliation for ongoing ceasefire violations, Iran's state-affiliated news outlet Tasnim said Monday.
If both the Strait of Hormuz and Bab al-Mandeb were effectively closed for a sustained period, the oil market would move from being worried about disruption to experiencing an actual supply shock.
The market is already pricing in serious risk. Brent crude is trading close to $100 per barrel after renewed concerns about Middle East tensions and the future of peace talks.
The key point is that Hormuz matters more than almost any other shipping route on Earth. Roughly 20–25% of global seaborne oil trade normally passes through it, while Bab al-Mandeb is the gateway between the Red Sea and the Indian Ocean and carries a significant share of oil shipments and wider trade.
If both routes were shut simultaneously, analysts estimate that around a quarter of the world's oil and gas supply could be affected.
Expectations are rising that -
Short term (hours to days): oil could jump rapidly from the current high-$90s to around $110–$130 per barrel as traders price in shortages.
If disruption lasts weeks: prices could move into the $130–$150 range.
If the closure becomes prolonged and stockpiles start running down: some analysts have suggested spikes towards $160 or even higher cannot be ruled out.
For the UK and Scotland, the effects would not be limited to petrol stations.
Higher oil prices would feed into:
Petrol and diesel prices.
Home heating costs.
Air fares and holiday costs.
Food prices (through transport and fertiliser costs).
General inflation, making interest-rate cuts less likely.
There is one important caveat. The world is not as vulnerable as it was during the 1973 oil crisis. Countries hold strategic reserves, the United States remains a major producer, and producers such as OPEC+ could increase output. Saudi Arabia also has some ability to bypass Hormuz through pipeline routes to the Red Sea, although not enough to replace all lost exports.
The bigger question may not be whether oil briefly reaches $120. The real danger is whether a prolonged closure creates a repeat of the inflation shock seen after Russia's invasion of Ukraine. A few days of disruption creates market volatility; a few months of disruption creates an economic problem affecting households, businesses and government budgets across Europe.
A Scottish angle is particularly interesting because Scotland would see a mixed effect: North Sea producers and energy firms could benefit from higher prices, while households, transport companies, fishermen, farmers and airlines would face sharply higher costs. That creates winners and losers at exactly the same time.