Middle East tensions have escalated dramatically, leading to significant disruptions in global energy supplies and a sharp increase in oil and gas prices. The conflict, involving Iran and impacting key energy infrastructure in the Gulf, has sent shockwaves through international markets, with analysts warning of prolonged economic consequences.

Kuwait's Mina Al-Ahmadi refinery caught fire following a drone attack, while Qatar's vital Ras Laffan energy hub suffered damage from Iranian strikes. This attack on Qatar's liquefied natural gas (LNG) facilities is estimated to cost $20 billion annually and could cripple its export capacity for three to five years, impacting approximately 17% of its LNG output. Repairs are expected to sideline 12.8 million tonnes per year of LNG.

Saudi Arabia's oil officials are privately warning that crude prices could surge past $180 a barrel if these disruptions continue beyond late April. The kingdom is concerned that such a spike could lead to permanently reduced energy consumption habits and trigger a global recession, ultimately harming demand for oil, on which its economy depends.

The crisis has sharpened anxiety in Riyadh, with Iran retaliating for an Israeli strike on its South Pars gas field by attacking facilities in Qatar and Saudi Arabia. Iran has also continued targeting shipping in the Gulf, effectively closing the Strait of Hormuz, through which roughly 20% of the world's oil passes. Benchmark Brent futures have risen as high as $119 a barrel, with some analysts at Wood Mackenzie warning that '$200 a barrel is not outside the realms of possibility in 2026.'

In Southeast Asia, Vietnam has seen petrol prices shoot up by over 20% overnight. The government announced an increase in the price of 95-octane gasoline by 20% to 30,690 Vietnamese dong ($1.20) per litre, and diesel by nearly 34% to 33,420 dong. These hikes mean prices for regular octane 95 and diesel are now over 50% and 70% higher, respectively, since the conflict began in late February. The Vietnamese government has sought fuel support from countries including Qatar, Kuwait, and Algeria.

The International Monetary Fund (IMF) has warned that prolonged increases in energy prices could drive inflation and lower growth globally. IMF spokesperson Julie Kozack noted that the conflict has already caused significant disruptions to oil and natural gas shipments, pushing crude oil prices up by more than 50% to over $100 a barrel. The IMF estimates that every 10% increase in energy prices, sustained for a year, could lead to a 40-basis-point increase in global inflation and a drop in output of 0.1% to 0.2%.

The escalating tensions have also impacted currency markets. The US dollar has retreated from multi-month highs as rising energy prices disrupt global interest rate expectations. While the US Federal Reserve is not expected to hike rates this year, other central banks are signaling tighter monetary policy. The European Central Bank warned of energy-driven inflation, the Bank of England signaled readiness to act, and the Bank of Japan is considering a hike as early as April. The Reserve Bank of Australia has already raised interest rates for the second consecutive month.

Nigeria's naira depreciated to N1,362/$ on Wednesday, according to data from the Central Bank of Nigeria (CBN). Trading was suspended on Thursday due to the Eid al-Fitr holiday.