Oil and gas prices have seen dramatic lifts as financial markets give their first reaction to the war in the Middle East.

Brent crude oil rose by as much as 13% to $82 per barrel at the start of Asian trading. It later settled around the $78 mark.

The big surprise was a major move north for natural gas costs.
Contracts for day-ahead delivery to the UK were up more than 30% early this afternoon while those for April delivery spiked by more than 50%. 

It should be pointed out that these increases still leave prices well below levels seen in 2022 when Russia invaded Ukraine.

The rises were attributed to news that Qatar’s state-owned energy firm had suspended production of all liquified natural gas (LNG) due to aerial attacks by Iran.

It all means that we could face bigger bills for things like fuel (by a couple of pence per litre) and household energy if these levels are sustained for an extended period of weeks and months.

It’s worth remembering, however, that no hikes to energy bills could come until the beginning of July, for those on the price cap. That is because the cap level for April to June has already been set.

Stock market values have suffered globally, with the FTSE 100 in London plunging by 1.2% to close at 10,780.

Defence-facing stocks saw the biggest gains, with BAE Systems rising 6.1%. Energy firms also did well on the back of those higher prices.

Financial and travel-related shares suffered the most. The biggest faller was IAG, the owner of British Airways, down 5.5%.

It was a similar story on the continent where major indices saw larger falls that those witnessed in London.

The DAX in Germany and CAC 40 in Paris were both down by more than 2% in late trading. In the US, the broad S&P 500 was just 0.2% lower.