Global oil prices rose sharply as markets reacted to a looming deadline set by US President Donald Trump for Iran to reopen the crucial Strait of Hormuz.
Brent crude, the international benchmark, climbed about 1.4% to $111.33 (£84.13) a barrel, while US-traded oil jumped 2.8% to $115.61. Trump had warned that the US could take military action against Iran “in one night” if a deal is not reached by 8:00 pm Washington DC time on Tuesday (00:00 GMT Wednesday).
Oil shipments from the Middle East have been heavily disrupted as Tehran threatens attacks on vessels using the strait in retaliation for US and Israeli airstrikes since 28 February.
Speaking at the White House, Trump said he believed “reasonable” leaders in Iran were negotiating in “good faith,” but noted the outcome remains uncertain. Iran has so far rejected temporary ceasefire proposals, insisting on a permanent end to the conflict and lifting of sanctions.
Experts said the price surge reflects concerns that the US may struggle to reach an agreement due to Iran’s hardline stance, and that the conflict could be prolonged.
Disruptions in the narrow waterway, through which about a fifth of the world’s oil and gas shipments pass, have pushed global energy costs higher and raised fears of inflation, particularly in energy-dependent economies like Japan and South Korea.
Ahead of the deadline, the UK will host allied military planners to discuss measures to secure the Strait of Hormuz once the conflict subsides, while Trump has called on countries to send warships to ensure safe passage for vessels. Several nations are also negotiating with Iran to protect shipping routes through the strait.
