Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.
Today, we’re looking at the Iran war’s mounting toll on global energy infrastructure, Britain’s push for energy independence, and the OECD’s call for an overhaul of the UK tax system.
But first, our number of the week…
55%
That’s how much prices for low-density polyethylene – a widely used plastic – have spiked at factories across Asia as the Iran war disrupts supply chains. At least one major toymaker has already started stockpiling inventory, warning that shortages could worsen.
Sidekick Takeaway: Oil is often thought of as a transport fuel, but it’s also a key input for plastics, fertilisers, and packaging materials. That makes it an underappreciated driver of consumer inflation across the economy that goes beyond what you pay at the pump.
Only have a minute to read? Here’s the TL;DR:
- Exxon Mobil lost 6% of its global production in Q1 as the Iran war paralysed Persian Gulf operations. Half the outages came from a damaged Qatari LNG complex that could take years to repair. Even with a ceasefire, supply disruptions look set to persist well into 2026, potentially driving lasting stagflationary pressures.
- The UK has approved an 800-megawatt solar farm in Lincolnshire – the country’s largest – which will be capable of powering 180,000 homes. While increased renewable output reduces dependence on the Middle East for oil, China’s dominance of the solar supply chain could introduce a different kind of geopolitical risk.
- The OECD has urged Chancellor Reeves to overhaul the UK’s tax system, warning that distortions in income tax and regressive VAT reliefs are dragging on the economy. With the UK’s 2026 growth forecast falling to just 0.7%, structural reform of the country’s fiscal policies appears increasingly urgent.
It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.
Pipe Down: Exxon Loses 6% of Output as War Upends the Middle East
This week, Exxon Mobil announced that the company lost 6% of its global production in the first quarter of 2026.
The culprit: the Iran war, which has paralysed oil and gas operations across the Persian Gulf.
Half the outages came from a Qatari LNG complex damaged by Iranian missile strikes. Qatar estimates the facility could take up to five years (and billions of dollars) to repair.
News of a two-week ceasefire prompted a stock market rally this week, with oil prices dropping below $90 a barrel. But the region’s energy infrastructure damage will last far beyond the war.
Infrastructure damage will outlast the fighting
While ceasefire proposals may have calmed markets, the energy supply picture remains dire:
- In addition to Exxon, rival Shell also reported lower quarterly gas production, indicating that infrastructure damage is industry-wide. Nonetheless, higher prices helped offset reduced supply for both firms.
- Capital inflows to fund infrastructure repairs in the region could prove scarce. JPMorgan strategists have warned that the conflict has seriously undermined the Gulf’s reputation as an investment hub.
- For now, oil markets are missing about 10 million barrels in daily supply due to war disruptions. Energy experts warn that even with a lasting ceasefire, reversing that supply crunch could take months.
The ceasefire itself remains fragile, with both sides reportedly continuing strikes. And until a lasting peace is reached, repairs won’t begin in earnest.
Sidekick Takeaway: With critical LNG and oil infrastructure still offline, energy supply disruptions are likely to persist well into the second half of 2026. Even if the war itself wraps up soon, the conflict’s stagflationary impacts could remain for some time.
Here Comes the Sun: UK Approves Massive Solar Farm Amidst Energy Crisis
The UK government has approved plans for an 800-megawatt solar farm in Lincolnshire – the country’s largest in terms of electricity generation.
While the site won’t be fully operational for years, it will eventually be capable of powering more than 180,000 homes annually.
The timing is hard to ignore. With the Iran war underscoring the vulnerability of fossil fuel supply chains, renewable capacity offers a hedge against geopolitical disruption.
Energy Minister Michael Shanks framed the project’s approval in exactly those terms, arguing that it’s crucial for the UK to prioritise energy independence.
One dependency for another?
The project marks a milestone for UK renewables. However, even solar energy introduces its own supply chain risks:
- China dominates the solar supply chain by an extraordinary margin, producing nearly 90% of photovoltaic modules. The UK’s clean energy ambitions risk swapping one geopolitical dependency for another.
- Making matters more complicated, both UK and EU officials have called for tighter restrictions on Chinese solar products. Concerns have mounted due to energy security risks and labour practices.
- Starmer has made resetting UK-China relations a priority. Nonetheless, given China’s dominance of the renewables supply chain, scaling domestic energy production will require careful trade-offs.
The UK’s new solar farm is a step in the right direction. But energy independence is a harder destination to reach than it sounds, even without fossil fuels.
Sidekick Takeaway: Solar is one of the cheapest forms of power available; building domestic capacity makes strategic and economic sense. But until the UK diversifies its sources of solar hardware, it remains exposed to supply chain disruption – just of a different kind.
Growing Up: OECD Urges Reeves to Overhaul UK Tax System
Last month, the OECD handed the UK the sharpest growth downgrade of any major economy.
Following a modest expansion last year, Britain’s 2026 growth forecast was cut to just 0.7%.
The OECD largely blamed the impact of the Iran war. Now, the organisation is back with a pointed follow-up: the UK’s tax system is undermining growth as well.
In a recent report, the OECD called for an in-depth review of the UK’s fiscal policies, arguing that distortions in the country’s tax structure are dragging on the economy.
Why existing fiscal rules undermine growth
The OECD identified several specific areas where the tax system is actively holding Britain back:
- Workers face high marginal tax rates above £100,000 as the personal allowance is withdrawn. This structure actively discourages high earners from working more.
- The OECD also recommended simplifying the UK’s sprawling network of VAT relief to lower compliance costs, noting that the current system is ‘largely inefficient and regressive.’
- Outside of taxation, the OECD recommended a slew of other growth-boosting policies, including improving women’s participation in the labour market and focusing on youth upskilling.
Whether or not the government acts on the recommendations, the report underscores a growing consensus: the UK’s fiscal policies need structural reform, not marginal improvements.
Sidekick Takeaway: Tax reform is difficult as a matter of politics, but appears increasingly necessary as a matter of economics. For Britons, a more efficient domestic tax system could boost consumer spending, business investment, and – ultimately – the attractiveness of UK capital markets.
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