Oil at $100: Transport and manufacturing sectors face insolvency pressures as energy costs surge

Oil prices above $100 per barrel are creating significant cost pressures for UK businesses, with energy-intensive sectors facing particular challenges. As BlackRock CEO Larry Fink warned the BBC^[1], sustained oil prices at $150 could trigger a global recession, with "profound implications" for the world economy.

The current energy price surge, driven by the US-Israeli war with Iran, has already pushed Brent crude above $100 per barrel^[2]. This marks a significant escalation from prices before the conflict began^[2], creating immediate concerns for sectors dependent on fuel and energy inputs.

Energy-intensive sectors by the numbers

Analysis of CompanyPulse company register data^[3] reveals the scale of UK businesses potentially exposed to rising energy costs. The freight transport by road sector alone comprises 75,541 companies^[3], making it the 20th largest business category in the UK.

While manufacturing doesn't appear in the top 20 sectors by company count, the data shows significant activity in related areas. Construction of domestic buildings accounts for 101,794 companies^[3], while development of building projects represents another 117,945 businesses^[3]. These construction-related sectors typically face high energy costs through materials production and site operations.

The take-away food sector, with 85,949 companies^[3], represents another category vulnerable to energy price increases through both transport costs and energy-intensive food preparation operations.

Historical precedent: The 2022 energy crisis

The CompanyPulse database shows that during the previous energy crisis period, UK businesses faced significant stress. Total insolvencies included 108,122 liquidations, 3,961 administrations, 546 voluntary arrangements, and 237 receiverships^[3]. These figures provide a benchmark for understanding potential business failures if current energy prices persist.

The liquidation figure of 108,122 companies represents the dominant form of insolvency, accounting for over 95% of all business failures in the dataset^[3]. This pattern suggests that when energy costs spike, smaller businesses without access to restructuring options may be forced directly into liquidation.

Current business formation trends

Despite energy price pressures, recent incorporation data from CompanyPulse shows continued business formation activity. On 23 March 2026, there were 3,555 new company incorporations^[3], following 2,941 incorporations on 18 March^[3].

The data reveals an uneven pattern of incorporations over the past month, with some days showing minimal activity (single-digit incorporations) while others see thousands of new companies formed^[3]. This volatility in formation rates may reflect business uncertainty amid the evolving energy crisis.

Government response and household impact

Chancellor Rachel Reeves has announced contingency planning for "every eventuality", with support planned for "those who need it most" if energy bills continue to spiral^[4]. However, any support package would be constrained by the government's borrowing rules and desire to keep inflation and interest rates "as low as possible"^[4].

For context, household energy bills are set to fall by 7% from 1 April 2026 under the new price cap, saving typical households £117 annually^[5]. However, energy consultancy Cornwall Insights^[5] predicts bills could rise by £332 at the next cap change if oil prices remain elevated.

This household pressure compounds challenges for consumer-facing businesses. As Fink noted, "Rising energy prices is a very regressive tax. It affects the poor more than the wealthy"^[1], potentially reducing consumer spending power across the economy.

Market volatility and forward outlook

Oil price volatility has intensified with conflicting reports about US-Iran negotiations. Brent crude fell 6.6% to $97.56 per barrel in morning trade in Asian trading after US President Trump claimed negotiations were underway^[2], though officials in Tehran disputed these claims, calling them "fake news"^[2].

The Strait of Hormuz, through which a fifth of the world's oil and liquefied natural gas usually moves^[4], remains a critical chokepoint for global energy supplies. This supply vulnerability underpins current price pressures and creates uncertainty for energy-dependent businesses.

With 5,520,375 active companies in the UK according to the data^[3], the ripple effects of sustained high energy costs could be substantial. Transport and logistics operations, manufacturing processes, and energy-intensive service sectors all face margin pressure as input costs rise.

The coming months will likely reveal whether current incorporation rates can be sustained amid energy cost pressures, and whether insolvency figures begin to echo the patterns seen during the 2022 crisis. For now, businesses in energy-intensive sectors must navigate an environment where oil at $100 per barrel may represent the new normal rather than a temporary spike.