"We are not there yet," said Roland Lescure, after finance ministers from leading industrialised countries, including UK Chancellor Rachel Reeves, gathered to discuss the economic impact of the conflict. The oil price reached nearly $120 a barrel on Monday over fears of a lengthy disruption to supplies, sending global stock markets lower. The head of the International Energy Agency (IEA) took part in the G7 meeting and said all options were discussed, "including making IEA emergency oil stocks available".

IEA executive director Fatih Birol said he provided the gathering with an update of market conditions in global oil markets, "which have deteriorated in recent days". "In addition to the challenges of transit through the Strait of Hormuz, a substantial amount of oil production has been curtailed. This is creating significant and growing risks for the market," he said. "IEA member countries currently hold over 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation." If reserves are released it would be the first time since 2022 following Russia's full-scale invasion of Ukraine. Major disruption to energy supplies from the region threatens to push up prices for consumers and businesses around the world. Rising inflation could lead to fewer interest rate cuts by central banks.

About a fifth of the world's oil supply is usually shipped through the Strait of Hormuz. But traffic through the narrow passage has all but halted since the war started more than a week ago. The US and Israel launched fresh waves of airstrikes across Iran over the weekend, hitting multiple targets including oil depots. Meanwhile, Iran targeted energy infrastructure in neighbouring Gulf states. Overnight, Saudi Arabia said it had intercepted and destroyed two waves of drones heading towards a major oilfield. (BBC)