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Oil prices have fallen and stock markets are clawing 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.
Iran latest: Trump’s key messages on war’s objectives
It’s currently off limits due to the threat of attack by Tehran’s forces in retaliation for the US-Israeli airstrikes that 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.
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 globally brought on by higher oil and gas costs that will affect everything from filling up at the petrol pumps and home heating, to the manufacturing industry and even fresh food production.
For the UK and wider Europe, it is already being seen through a leap in fuel prices, especially diesel.
Average pump costs have risen by…
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