Gas prices hit record for mid-August as Hormuz traffic falls to three-month low

Gas prices have reached their highest level ever recorded for mid-August, according to the Independent, as the standoff between the United States and Iran over the Strait of Hormuz enters its third month. The same outlet reports that shipping traffic through the strait is near a three-month low, while Iran has rejected Donald Trump's claim of "total control" over the waterway.

The Daily Mail carries new details of what it describes as a "shoulder-fired missile threat" and reports that intelligence about the location of Trump's bedroom caused his security team to scramble. The Strait of Hormuz is the world's most important oil chokepoint - around a fifth of global petroleum passes through it. Any sustained reduction in traffic or rise in perceived risk pushes up energy prices across Europe, which remains a net importer of liquefied natural gas.

The price spike in mid-August is unusual because it's outside the usual winter demand peak. Gas prices typically rise from October as heating demand climbs. A sustained increase now, driven by supply anxiety rather than weather, suggests markets are pricing in a longer disruption than governments are publicly forecasting. That has consequences for inflation, household energy bills, and the cost of industrial production - all of which feed back into interest rate decisions at the Bank of England.

What to watch: whether traffic through Hormuz continues to fall, and whether the price spike holds into September. If it does, the autumn budget will be written against a very different energy assumption than the Treasury used in July.