Iran battle oil value surge continues – with panic-buying spreading to Europe with enormous queues in Spain and Germans driving throughout the border to refill

Oil prices have continued to surge for a third day due to the conflict in Iran, with Europe seeing an increase in people panic-buying fuel.

Long queues have been seen in Spain‘s Andalusia region, with dozens of cars in Sevilla waiting to fill up at one petrol station before prices rise further.

In Jerez, forecourts were extremely overcrowded due to the high volumes of people trying to fill up their motors. 

Spain’s consumer association OCU warned that the war in the Middle East could push fuel prices up by between 8 and 10 cents per litre in the next few weeks.

In Germany, where prices have already exceeded €2 per litre, many are rushing to the neighbouring Czech Republic where filling up is cheaper. 

The chaos has led to traffic jams at the border, and some gas stations have already run out of fuel.

Long lines were also seen forming in Britain in areas like Liverpool, Manchester and south London as drivers scrambled to fill up.

Traders’ rush to unload different asset classes around the world has at times threatened to become chaotic this week as they process the consequences of energy prices remaining elevated for an extended period of time.

Plunges in one part of the market have spilled over into others as investors try to cover for losses elsewhere and cut down on risks.

Even safe-haven gold for example fell more than 4% on Tuesday, though it was back up 1.5% on Wednesday at $5,155 an ounce. 

At the heart of it all, benchmark Brent crude was at $83.76 a barrel on Wednesday, up for a third straight day, though off its Tuesday highs, after US President Donald Trump said the US Navy could escort tankers through the key Strait of Hormuz if necessary.

Ship owners and analysts were uncertain how practical that would be.

Speaking on the BBC’s Today programme, Lindsay James an investment strategist at wealth management firm Quilter, said investors are looking at ‘a growing probability of this conflict just taking longer to resolve’.

However, she added it was important to keep in perspective that the current gas price levels were ‘not anywhere near as significant as we have previously seen’ when Russia invaded Ukraine in 2022.

Iran vowed to bring chaos to the global energy market by announcing they would close the Strait of Hormuz and ‘burn every ship’ attempting to pass and drive oil prices to $200 a barrel.

The Strait of Hormuz is a critical chokepoint for flows of both oil and gas from the Middle East, accounting for roughly a fifth of global liquefied natural gas (LNG) trade. 

In a Truth Social post on Tuesday, Trump said: ‘Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf. This will be available to all Shipping Lines.’

‘If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible. No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD.’

The strain on Wednesday was felt most strongly in South Korea, where the KOSPI benchmark closed down 12%, its largest drop on record. South Korea is heavily reliant on Middle Eastern oil.

Over two days the tech-heavy index has lost more than 18% of its value while the currency has slumped to a 17-year low.

Japan’s Nikkei fell 3.6% and Taiwan stocks dropped 4.3% as investors raced out of what has been one of the hottest bets of the last few months in semiconductor makers.

‘Many of the places people had been diversifying into prior to the Iran attacks suddenly now appear most vulnerable,’ Matt King, founder of financial market research firm Satori Insights, wrote in a note.

‘The ‘sell-what-you-can’ phase is spreading,’ said Charu Chanana, chief investment strategist at Saxo in Singapore.

‘Asia’s selloff is turning disorderly because markets are no longer treating this as a ‘one-week headline shock.’

But in a sign markets can still surprise in both directions, Europe’s broad STOXX 600 rose 0.6% on Wednesday, albeit after falling 4.6% on Monday and Tuesday, its biggest two-day fall since April 2025’s tariff turmoil. 

Helping Europe, benchmark gas prices also steadied on Wednesday, though they are roughly 75% higher than Friday’s close. 

Spanish stocks and bonds lagged somewhat after Trump threatened to impose a trade embargo on the country.

Wall Street meanwhile has dodged the worst of the selling, and the S&P 500 is down just under 1% so far this week. 

Futures were last down 0.3% Goldman Sachs CEO David Solomon said in a speech in Sydney that he’d been surprised at markets’ ‘benign’ reaction up to now to the building risks.

‘I think it’s gonna take a couple of weeks for markets to really digest the implications of what has happened both in the short term and medium term, and I can’t speculate as to how that would play out,’ he said.

Bond markets, after an initial rally, are now under pressure as investors bet higher oil prices will stoke inflation and delay rate cuts. 

 Traders now see the Federal Reserve as more likely than not to hold rates in June.

‘For the United States, this is very clearly inflationary…so the market’s reassessing whether the Fed can actually deliver any rate cuts at all this year,’ said Andrew Lilley, chief rates strategist for Australian investment bank Barrenjoey. 

The benchmark 10-year Treasury yield was up 3 bps on the day at 4.08%, having gained 12 bps this week, while rate-sensitive two-year yields are 15 bps higher on the week and last at 3.51%.

Elsewhere, a rate cut by the Bank of England later this month that had been seen as all but certain now looks off the table, sending the two-year gilt yield up 25 basis points this week. 

That has left cash as the beneficiary, with flows rushing into money-market funds from riskier bets.

The euro was pinned at $1.16, steady on the day but down 1.5% this week, hammered by higher energy costs.

The dollar has gained more broadly even on currencies seen as safe havens, and is up 1.4% on the Japanese yen this week and 0.7% on the Swiss franc.