Over a barrel: what does the energy crisis caused by the Iran war mean for UK households?

With the flow of oil from the Middle East drying up and energy prices skyrocketing, the economic outlook is grim. Jonathan Prynn looks at the options facing Rachel Reeves and Keir Starmer

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You could almost feel the collective sigh of relief wafting around the world on Tuesday when Donald Trump pronounced that his war on Iran would be over "very soon.

Financial and energy markets calmed down after their spectacular fit of the vapours on Monday, with oil prices easing back to $90 a barrel from a spike of close to $120, and shares on the rise again.

Once again it seemed the markets had bullied the TACO Commander in Chief into a swift climbdown. Nothing to see here.

Well what a difference another 48 hours makes. At the time of writing, global energy markets are still a very long way from returning to normal with the oil price shooting back above the $100 mark overnight after attacks on three cargo ships.

The Strait of Hormuz, the narrow marine pinch-point between Iran and Oman through which around a fifth of global oil and liquefied natural gas flow, about 20.9 million barrels per day, remains all but blocked.

Currently only a handful of ships a day are passing through a waterway typically used by around 60 vessels daily. Meanwhile, production of liquefied natural gas in Qatar is still suspended following Iranian drone attacks. That instantly removed around a fifth of the world's supply.

Other major producers including Saudi Arabia, Iraq, Kuwait and the United Arab Emirates have all slashed oil and gas output.