8th November 2026
The conflict involving Iran, the United States and Israel has the potential to become much more than a regional military confrontation. If the fighting spreads to involve Saudi Arabia and the Houthi forces in Yemen, two of the world's most important shipping corridors could be threatened simultaneously.
For Britain, and particularly for communities such as Caithness that depend on road transport, deliveries and affordable energy, the economic consequences could be considerable.
The two strategic waterways are the Strait of Hormuz and the Bab el-Mandeb Strait. They sit at opposite ends of the Arabian Peninsula and provide vital routes for oil, gas and international trade.
A disruption to either would cause difficulties. A prolonged disruption to both could create a much more serious economic shock.
Two narrow passages with enormous economic importance
The Strait of Hormuz lies between Iran and Oman. It is the principal maritime exit for oil and gas produced in the Persian Gulf.
The International Energy Agency estimates that around 20 million barrels of oil and petroleum products passed through it each day during 2025. That represented approximately a quarter of global seaborne oil trade.
It is also important for liquefied natural gas, particularly supplies from Qatar. Around a fifth of global LNG trade passed through the strait in the first half of 2025.
There are alternative pipelines, including routes through Saudi Arabia and the United Arab Emirates, but their capacity is insufficient to replace all the shipments normally using Hormuz.
The second passage, Bab el-Mandeb, connects the Red Sea with the Gulf of Aden and the Indian Ocean. It is the gateway to the Suez Canal, one of the principal routes connecting Asian manufacturing centres with European markets.
The US Energy Information Administration recorded oil flows through Bab el-Mandeb averaging approximately 4.2 million barrels daily in the first half of 2025. These flows had already fallen substantially following attacks on commercial shipping by Yemen's Houthi movement.
The geographical significance is straightforward. Hormuz provides the main maritime exit from the Persian Gulf, while Bab el-Mandeb provides access to the Red Sea and Suez Canal.
If both become unsafe, shipping companies face difficult choices.
What happens if both routes are threatened?
A shipper unable or unwilling to use Hormuz may have to find alternative supplies or use pipelines where capacity permits.
A shipper avoiding Bab el-Mandeb and the Red Sea can sail around the Cape of Good Hope at the southern tip of Africa.
But that adds considerable distance, fuel consumption, crew costs and time.
It also means ships are tied up for longer journeys, reducing the number of voyages that each vessel can complete. More ships may therefore be needed to transport the same quantity of goods.
Insurance premiums can rise sharply when vessels enter areas considered at risk of missile, drone or naval attacks. Some insurers may refuse cover altogether, while shipping companies may suspend services.
These costs do not remain with shipping companies. They eventually find their way into the prices paid by businesses and consumers.
The experience of the Red Sea disruption since late 2023 has already demonstrated how quickly shipping companies can change their routes. A simultaneous and prolonged disruption involving Hormuz would introduce an additional problem: the availability of the energy supplies needed to power the global economy.
Oil prices are only the beginning
The most immediate concern would be oil.
Even countries that do not directly import much Gulf oil would be affected because oil is traded internationally. A reduction in available supplies pushes up the price paid by buyers elsewhere.
Britain is not insulated simply because it has North Sea production. UK oil producers generally sell into international markets, meaning domestic prices remain influenced by global conditions.
Higher crude prices feed into petrol and diesel costs, aviation fuel, transport and the cost of moving goods.
Heating oil users in rural Scotland could be particularly exposed. Many homes in Caithness and Sutherland do not have access to mains gas and rely on heating oil, electricity or other fuels.
A rise in the wholesale price of oil can therefore become a direct household expense, particularly for people who have to fill a domestic oil tank in one large purchase.
Natural gas presents another problem. Qatar is a major LNG exporter, and its shipments normally pass through Hormuz. If exports are interrupted, international gas markets would have to compete for alternative supplies.
That matters in Britain because gas prices influence the cost of electricity generation, even though the country has substantial renewable electricity capacity.
The consequences could therefore extend to household electricity bills as well as petrol, diesel and heating oil.
The effects would reach far beyond the fuel forecourt
Oil and gas are only part of the problem.
Modern manufacturing depends on international supply chains. Components, chemicals, plastics, fertilisers, metals and food ingredients all move through international shipping networks.
Disruption to energy supplies can increase the cost of producing fertiliser, operating factories and transporting agricultural produce.
Food prices could consequently rise even if Britain continues to import food from countries nowhere near the Middle East.
Supermarkets, wholesalers and smaller retailers would face higher transport and distribution costs. Businesses might initially absorb some of these increases, but prolonged disruption would make that increasingly difficult.
There is also the possibility of shortages of particular components and materials if shipping delays coincide with reduced production.
The economic impact would therefore spread gradually from energy markets into the wider cost of living.
What would it mean for Britain?
The Bank of England has already had to consider the inflationary consequences of the Middle East conflict.
Its November 2026 Monetary Policy Report identifies continuing pressure from higher energy prices, including diesel and gas, and warns that a prolonged shock could weaken household spending and economic activity.
This creates a difficult situation for the Government.
If inflation rises again, the Bank of England may have less room to reduce interest rates. If borrowing costs remain high, households with mortgages, businesses with loans and the Government itself all face additional financial pressure.
There is a further danger that consumers respond by cutting their spending.
When households pay more for heating, fuel and food, they have less money available for shops, restaurants, holidays, home improvements and other purchases.
That can affect employment and business investment.
A shipping crisis could therefore contribute to a wider economic slowdown at precisely the time when Britain is trying to improve economic growth.
Why Caithness could feel the effects particularly strongly
Caithness is not directly dependent on shipping through the Red Sea or Persian Gulf, but that does not make it immune.
Distance and transport dependence are important considerations.
People in Wick, Thurso and surrounding communities often have to travel considerable distances for work, shopping, healthcare and other services.
Higher diesel and petrol prices affect household budgets, but they also increase the operating costs of delivery vehicles, agricultural machinery, construction equipment and local businesses.
For farmers, higher fuel and fertiliser costs could arrive together. For hauliers, the cost of moving goods north could increase. For shops, the expense of replenishing stock could rise.
Small businesses generally have less financial room to absorb sudden increases than large national companies.
Heating is another concern. Many rural households rely on heating oil, and a significant rise in prices can be difficult to manage when a tank needs replenishing.
There is also a potential impact on tourism. Visitors travelling long distances by car may reconsider their journeys if fuel prices rise substantially. Businesses providing accommodation, food and leisure services could then face another source of pressure.
For a rural economy already dealing with transport costs, distance and relatively limited consumer spending, these additional pressures should not be dismissed.
Could Britain protect itself?
There are some safeguards, but none offers complete protection.
Britain has domestic oil and gas production, electricity from renewable sources, fuel storage and the ability to import energy from different markets.
The country can also source goods from alternative suppliers and shipping routes.
However, replacing supplies is not necessarily quick or inexpensive. Alternative shipping routes have limited capacity, and other countries would be competing for the same available energy and materials.
The Government should therefore be looking beyond the immediate military situation.
It needs to consider the resilience of fuel supplies, the adequacy of emergency stocks, the security of electricity generation and the ability of essential businesses to continue operating during prolonged disruption.
There is also a case for reviewing how well prepared rural communities are for sudden increases in transport and heating costs.
A regional conflict with global consequences
It is important not to assume that both shipping routes will necessarily be closed. The Cape of Good Hope remains an alternative to the Red Sea route, while pipelines can bypass part of the disruption around Hormuz.
Nor would a temporary interruption automatically mean that Britain runs out of fuel or food.
But the economic danger lies in the cumulative effect of disruption, higher insurance, longer journeys, restricted energy supplies and rising commodity prices.
The military situation is already concerning. Further American attacks on Iran could provoke retaliation, while an expanded Saudi-led campaign against the Houthis could open another front in an increasingly complicated regional conflict.
The possibility of two shipping corridors being threatened at the same time deserves much more attention in Britain than it currently receives.
For Caithness, the lesson is straightforward. The price of fuel, the cost of transporting goods and the price of keeping a home warm are connected to events taking place thousands of miles away.
A war in the Middle East does not have to reach British shores to affect British households. If the world's energy and shipping lifelines are threatened together, the economic consequences could arrive at the petrol pump, the supermarket checkout and the household heating tank.