Oil prices have fallen back and stock markets are set to claw back some lost ground after Donald Trump raised hopes that Iran war disruption to the global economy would soon be over.
Brent crude oil, the international benchmark, tumbled below $90 a barrel at one stage early on Tuesday after climbing above $118 – a six-year high – in the previous session.
The key worry is the effective closure of the narrow Strait of Hormuz shipping lane just off the Iranian coast.
It’s currently off limits due to the threat of attack by Tehran’s forces in retaliation for the US-Israeli airstrikes that have targeted its leadership and key infrastructure.
President Trump gave mixed messages on the status of the war on Monday evening, after describing US objectives as “complete” and declaring that it “could be over soon”.
He added: “I will not allow a terrorist regime to hold the world hostage and attempt to stop the globe’s oil supply, and if Iran does anything to do that, they’ll get hit at a much, much harder level.”
The strait usually accounts for about a fifth of global oil and natural gas deliveries but they have almost ground to a halt over the past 10 days.
Oil prices surge past $100 per barrel as Iran war closes world’s biggest energy terminals
Mark Kleinman blog | TG Jones-owner Modella weighs sale of footwear retailer Wynsors after three months
‘We’re in our late 60s but don’t want to downsize – how can we boost our retirement pot?’ | Money blog
It has stoked market fears that a new wave of energy-led inflation is on the way – a surge in the pace of price increases brought on by higher oil and gas costs that will affect everything from filling up at the petrol pumps and home heating to manufacturing industry and even fresh food production.
The G7 advanced economies, including Britain, plan to release reserves if needed to ease the squeeze from the loss of Middle East output and deliveries.
A short time ago Brent was trading at $92 a barrel in volatile trading in Asia.
Data from the trading platform IG showed the FTSE 100 was on track to open later around 0.4% higher.
That would recover the ground lost yesterday following the 1.8% decline seen at Monday’s open.
Be the first to get Breaking News
Install the Sky News app for free
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the fullest version.
You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.
