The ongoing crisis between Israel and Iran has led to a significant increase in oil prices, with Brent crude rising to $78 a barrel on Friday. This surge has raised concerns about potential disruptions in the flow of crude oil from the Middle East region to the global market.

Despite the recent spike, oil prices have since cooled to below $75 a barrel, remaining well below the peak of $115 a barrel seen after the Ukraine crisis. However, experts warn that the trajectory of oil prices will depend on the escalation of the conflict between Israel and Iran.

Analysts predict that oil prices could potentially reach $120 a barrel if the crisis intensifies further. Deutsche Bank warns that a complete shutdown of Middle Eastern oil exports due to a wider regional conflict could lead to a surge in prices. However, most experts believe that the market has already factored in some loss of Iranian oil production, suggesting that prices are likely to stabilize around $75 a barrel.

The focus remains on the Strait of Hormuz, a crucial chokepoint for global oil supplies. The strait, through which 20% of global oil supplies flow, is a key concern due to its vulnerability to regional tensions. While the strait remains open, reports of electronic interference from Iran have raised concerns about potential disruptions in maritime traffic.

In the UK, the impact of higher oil prices on household finances is expected to be felt through increased petrol prices and gas bills. While recent oil price hikes may lead to a slight increase in petrol and diesel prices at the pump, wholesale costs are still lower than earlier this year. An escalation of the conflict that affects UK gas imports from Qatar could also impact heating bills in the country.