The world changed last weekend. If you’ve been watching the news and wondering what it actually means for your money, your mortgage, and the price of filling up your car, you’re in the right place.
What Actually Happened and Why It Matters
On 28 February 2026, the United States and Israel launched coordinated military strikes on Iran, targeting nuclear sites, military infrastructure, and senior leadership. Iran retaliated fast, hitting US military bases across the Gulf and targeting energy infrastructure in Qatar, the UAE, Bahrain, and Saudi Arabia. Then came the move that shook global markets harder than anything else: Iran declared the Strait of Hormuz closed.
If you haven’t heard of the Strait of Hormuz, here’s why it matters to you. It’s a narrow strip of water, just 21 miles wide at its tightest point, and roughly 20 million barrels of oil pass through it every single day. That’s about a fifth of all the oil traded globally. China, India, Japan, South Korea all depend on it heavily. When Iran threatens to shut it, the entire global economy takes notice.
The Oil Price Spike and Where Things Stand Now
Brent crude jumped from $73 to over $82 a barrel in just a few days. That’s a 10% move in a weekend, which in oil terms is enormous. Analysts at JPMorgan are warning that if the disruption drags on beyond three weeks, prices could hit $120 a barrel. Some at Deutsche Bank have gone further, suggesting $200 in a worst case scenario. If things calm down quickly, we could drop back to the $60 to $70 range. Nobody knows exactly where it lands, and anyone telling you they do is guessing.
What This Means for Your Petrol, Energy Bills, and Inflation
This is where it gets personal. The RAC has already said that if oil stays around $80 a barrel, petrol prices will average around 136p per litre. At $90 that becomes 140p, and at $100 it pushes towards 150p. Right now the average sits around 132p. So yes, it’s going up.
On energy bills, wholesale gas prices have hit levels not seen since 2023, up around 36% year on year. Most households are sheltered by the Ofgem price cap for now, but if this drags into summer the picture could change quickly.
The wider inflation impact is real too. Economists at the National Institute of Economic and Social Research have calculated that a sustained oil and gas price shock would push UK inflation up by around 0.7 percentage points and shave 0.2% off GDP growth. Not catastrophic, but not nothing either, especially when household budgets are already stretched.
Your Mortgage Could Be Affected and Most People Haven’t Clocked This Yet
A fortnight ago markets were pricing in an 86% chance the Bank of England would cut interest rates this month. That figure has now collapsed to below 5%. The base rate sits at 3.75% and there had been genuine optimism about further cuts through 2026. That optimism has taken a serious knock.
If your mortgage is up for renewal in the next six months, please speak to a broker sooner rather than later. The cheap fixed rate deals that looked certain just a few weeks ago are looking a lot less guaranteed now.
Who Is Making Money and Who Is Getting Hammered
Not everyone is losing here. BAE Systems shares hit all time highs, up nearly 7% on the day of the strikes and up 26% for the year so far. BP and Shell have both risen sharply. Gold broke above $5,300 per ounce for the first time in history, with JPMorgan now targeting $6,300 by the end of 2026. Government bonds and the US dollar are also attracting safe haven money.
On the losing side, airlines are getting battered. IAG, the parent company of British Airways, fell 13%. Wizz Air dropped 14%. Ryanair was down over 4%. Higher fuel costs, airspace closures, and disrupted routes are a brutal combination for carriers. Cruise companies and banks with Gulf exposure have also taken a hit.
Could This Tip the World Into Recession?
It depends entirely on how long this lasts. Former White House energy adviser Bob McNally has been direct about it: a prolonged Strait of Hormuz closure means a global recession. For the UK specifically, with growth already sluggish and unemployment creeping up, a sustained energy price shock is the last thing needed. The most likely scenario is a short, sharp spike followed by a gradual normalisation. But that is not guaranteed, and anyone managing money needs to keep one eye firmly on the Gulf right now.
What You Should Actually Do
We don’t do panic. Markets have survived wars, oil crises, and financial collapses before, and they will again. But there are sensible things worth doing right now.
If you own a home or are about to buy, talk to a mortgage broker this week. If you invest, consider whether you have any exposure to energy, defence, or gold, because those areas are performing well in this environment. And if you’re simply keeping an eye on things, watch whether commercial shipping resumes through the Strait of Hormuz. That single piece of news will tell you more about where this is heading than any press conference or political statement.
We’ll keep tracking this as it develops. Stay sharp.
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