Closing post
Time to wrap up…
Oil prices have jumped back above $100 a barrel and global stocks fell after weekend talks between the US and Iran ended without an agreement and Donald Trump imposed a blockade of the strait of Hormuz.
The US president announced the blockade on Sunday, targeting Iranian vessels and ships that have paid a toll to Iran for passage through the strait, in an attempt to choke off the flow of Iranian oil.
US Central Command said it would start blocking all Iranian Gulf ports and coastal areas from 3pm UK time, in effect seizing control of maritime traffic in the strait of Hormuz.
Trump said on Monday afternoon that ships coming near the blockade would be “eliminated”, warning Iran not to send its “fast attack ships”:
Warning: If any of these ships come anywhere close to our BLOCKADE, they will be immediately ELIMINATED, using the same system of kill that we use against the drug dealers on boats at Sea. It is quick and brutal. P.S. 98.2% of Drugs coming into the U.S. by Ocean or Sea have STOPPED!
Oil and gas prices rose sharply again, after the two-week ceasefire between the US and Iran announced on Wednesday prompted a sharp fall in energy prices, and crude ended the week below the psychologically important $100 a barrel threshold.
Brent crude rose 6.9% to $$101.74 a barrel on Monday, while US crude was up 7.2% at $103.55 a barrel.
Gas prices also increased, with the British wholesale gas contract for May soaring by almost 12% earlier and later up 7.25% at 117.57p per therm.
More here:
And Goldman Sachs has beaten expectations with its first-quarter results, reporting a rises in profits and higher-than-expected investment banking revenue.
Updated
FTSE 100 closes lower
After a day dominated by Iran worries, London’s stock market has closed slightly lower.
The FTSE 100 index of blue-chip share has ended the day down 17.5 points, or -0.17%, at 10,582 points.
Utility companies led the fallers, perhaps a sign that investors are losing their appetite for ‘defensive stocks’ that might protect them from a market wobble.
Oil companies posted some gains, with BP up 0.9% and Shell gaining 1.5%.
Pistachio prices hit eight-year high as Iran war hits supplies
The war in Iran has pushed prices of pistachios nuts to an eight-year high, Bloomberg has reported.
Iran is the world’s second-largest producer of pistachios, they say, and the conflict is restricting supplies.
Bloomberg point out that pistachio consumption has surged globally since pistachio-filled “Dubai chocolate” bars went viral on TikTok and Instagram in 2023. Major food brands like Häagen-Daz and Táche have added the nut to ice cream and plant-based milk ranges, while Starbucks has popularized pistachio-flavored coffee.
This has pushed pistachio prices to $4.57 a pound in March, the highest since May 2018.
Oil drops, briefly, amid Iranian unanium confusion
The markets remain rather febrile today, and headline-driven.
We’ve just seen an example – oil briefly fell below $100 a barrel, following a news flash that “IRANIAN OFFICIALS ARE STUDYING ABANDONING URANIUM ENRICHMENT AS A U.S. CONDITION FOR ENDING THE WAR”.
That claim was attributed to the New York Post – and it appears to come from the Post’s foreign policy reporter Caitlin Doornbos.
However, that’s not exaactly what she wrote.
Actually, Doornbos posted on X:
Iranian officials are still considering the US proposal to end the war, centered around giving up uranium enrichment.
One thing affecting why Iran couldn’t make a deal while US was in Islamabad: while Vance called Trump 6+ times, Iranians could not call their final decision-maker back in Tehran due to security risks — and likely would have had to return home to discuss an agreement in person, a Pakistani analyst told me.
And as she posts in a second message (after the markets got excited), the uranium line isn’t new!
This took off unnecessarily, and now I have a responsibility to clarify. All I meant was: 1) The proposal centered on Iran giving up its nuclear program -- that we knew from Vice President JD Vance on Sunday. 2) It’s still a possibility that Iran could accept that point. None of this is new (which is why I haven’t published anything on it.)
Brent crude has now inched back to $101 a barrel, as traders calm down.
Donald Trump has warned Iran not to try to breach the new US blockade.
Posting on Truth Social, he says:
Iran’s Navy is laying at the bottom of the sea, completely obliterated - 158 ships. What we have not hit are their small number of, what they call, “fast attack ships,” because we did not consider them much of a threat.
Warning: If any of these ships come anywhere close to our BLOCKADE, they will be immediately ELIMINATED, using the same system of kill that we use against the drug dealers on boats at Sea. It is quick and brutal. P.S. 98.2% of Drugs coming into the U.S. by Ocean or Sea have STOPPED!
Thank you for your attention to this matter. President DJT
Goldman boss 'aware'of Anthropic’s Mythos AI's powers
Goldman boss David Solomon has played down concerns over Anthropic’s Mythos AI model, despite being part of a group of banking chiefs summoned to the US Treasury in Washington last week to discuss potential cyber risks and threats to financial stability.
He told analysts on an earnings call that the bank was “hyperaware of the enhanced capabilities of these models” and was working with both the US government and tech firms to assess them.
However, the CEO said it was “part of our ongoing capabilities that we have been investing in and are accelerating our investment in,” adding:
“We’re aware of Mythos and its capabilities. We have the model, we’re working closely with Anthropic, and all of our security vendors, to kind of harness frontier capabilities wherever it’s possible.
And this will continue to be an important focus. But it’s not new…technology evolves, we have to continue to upgrade for cyber risk and make sure we’re at the forefront of that.”
Updated
Goldman Sachs’ CEO David Solomon also defended the bank’s involvement in the private credit market, saying that the bank saw an rise in investment at a time when rivals have suffered a surge in withdrawal requests from jittery clients.
He suggested part of the surge in withdrawal requests at some rivals - which have forced some private credit lenders like Blue Owl to cap redemptions - was primarily driven by retail investors (we’re talking high net worth clients here) rather than institutional investors who were holding their ground.
Solomon told analysts that institutional investors - banks, insurance companies, and pension funds - made up around 40% of the new investment in Goldman’s private credit funds during the first quarter (which led to a 7% net increase in overall investment during the three months to March).
“I know the media headlines have driven an enormous amount of negative sentiment around private credit. You know, my own view is it’s important to really distinguish between different markets and really try to put it all in perspective.”
“There obviously are high redemptions in certain pure managed funds. These peer managed funds have been concentrated in retail outflows as opposed to institutional outflows. And one of the things that we’re seeing that’s just interesting, that’s quite constructive for our business, is that spreads are becoming more lender friendly”
He added:
“Our 30 year track record of performance and private credit is characterised by rigorous underwriting, selective deployment, and disciplined portfolio construction”
Goldman's Solomon: 2026 began with optimism, before Iran war
Goldman Sachs’ CEO David Solomon has cheered the bank’s Q1 earnings, saying “elevated uncertainty” caused by the Iran war, AI jitters and private credit fears led to a surge in trading and demand for its investment banking services.
Solomon told analysts that the environment had changed significantly since the turn of the new year:
“2026 began with a degree of optimism. Markets hit record highs and confidence continued to build, with most clients focused on growth, strategic activity, and capital deployment. As we’ve said, things were only moving a straight line, and as the quarter progressed, the macro environment started to weigh on sentiment.
“Volatility increased meaningfully amid concerns around AI driven disruption in sectors like software. Heightened uncertainty in parts of private credit, and the conflict in the Middle East.”
With Wall Street opening in the red, Tom Stevenson, investment director at Fidelity International says:
“A weariness is setting in as investors increasingly choose to wait and see while tensions in the Gulf ebb and flow. With sentiment having swung back and forth since the beginning of March, but markets remaining at or slightly above where they started the year, no-one is willing to take big bets until it is clearer where the US-Israel-Iran conflict is heading.
“Meanwhile, companies and households are getting on with their lives, acclimatising to what looks like a persistently higher oil price, rising inflation and higher for longer interest rates. This week, the US reporting round gets underway once more, with first quarter results shining a light on how geo-politics is showing up at the coalface of business and the broader economy.
Wall Street opens in the red
The New York stock market has begun the new week with losses.
Wall Street’s main indexes have opened lower, after last weekend’s talks between the US and Iran failed to deliver a deal to end the war.
With optimism of an early end to the conflict fading, the Dow Jones Industrial Average has dropped by 368 points, or 0.77%, to 47,548 in early trading.
The broader S&P 500 index is down 0.3%, while the tech-focused Nasdaq has lost 0.35%
Opec lowers second-quarter global oil demand forecast
Opec, the oil cartel, has predicted that demand for crude will drop in the second quarter of this year, but then rebound.
Opec has lowered its forecast for world oil demand in the second quarter by 500,000 barrels per day.
However, for 2026 as a whole, global oil demand is still forecast to grow by a healthy 1.4 million barrels per day – unchanged on last month’s forecast - driven almost entirely by demand from non-OECD regions, mainly China, India and Other Asia.
Opec says:
The slight transitory weakness in oil demand growth in 2Q26, given the ongoing developments in the Middle East, is expected to be compensated for in 3Q26 and 4Q26.
Oil is still bobbing above $100 a barrel, as the 3pm BST deadline for the US’s blockade of the strait of Hormuz approaches.
Brent crude is 7.5% higher today at $102.31 a barrel.
While there is disappointment that the US-Iran talks broke up last weekend, there is also some optimism that the ceasefire announced last week is holding.
Paul Diggle, chief economist, at Aberdeen, says:
For all that it is in risk-off mode this morning, the market is arguably still taking a “glass half full” interpretation of the outlook.
Perhaps a single round of talks should never have been expected to yield immediate results. The progress was the in-person talks happening at all.
The US blockade may bring not just economic pressure on Iran, but also diplomatic pressure from China (the destination of a large share of Gulf energy exports, including what had still been flowing from Iran). China apparently played an important part in pressuring Iran to the negotiations last week.
The ceasefire itself is still holding for now, although it’s obviously extremely fragile.
Union: Make UK public transport free to help with cost of living squeeze
UK transport and travel union TSSA is calling on the government to take immediate action to help the public with the jump in the cost of living due to the Iran war.
This includes making public transport free at the point of use for the next year.
TSSA general secretary Maryam Eslamdoust explains:
“Yet again Donald Trump’s recklessness over Iran is having an effect of world oil prices which will in turn hit our communities here at home really hard.
“We are facing into a major economic crisis of Washington’s making at a time in which many people are already really struggling with the cost of living.
“Not only should our government be carrying out the work of diplomacy to help find a solution to the conflict but it’s vital that Ministers act without delay to take serious measures to help people here at home.
“Making public transport free at the point of use for the next twelve months would provide people with the assistance they need and also act as a huge economic stimulus.
“Not only that, but the Prime Minister should also convene regular COBRA meetings examining the full range of measures which can help people with their bills and consider setting up a national Cost of Living Taskforce.”
Although Goldman Sachs has beaten profit forecasts, its share are down 4.5% in pre-market trading.
Traders could be concerned that Goldman’s revenues from Fixed Income, Currency and Commodities (FICC) fell by 10% in the first quarter.
Axel Rudolph, chief technical analyst at investing and trading platform IG, says today’s results have failed to “pique investors’ attention”
“Goldman Sachs has delivered a solid set of numbers, but in this environment ‘solid’ isn’t quite enough to keep investors interested. The strength in equities trading and dealmaking shows that the machine is still firing on all cylinders, yet the drop in FICC revenues is a reminder that this is not a one-way street, especially with markets being buffeted by the Iran war.
After such a strong run in the share price, investors were clearly looking for something exceptional, not just good. The bigger issue is that Goldman’s results feel like a snapshot of a world that may already be fading. With oil prices surging, inflation fears building and recession risks creeping back in, the outlook for dealmaking and capital markets activity becomes far less certain.
In that context, today’s numbers risk being seen as close to peak earnings, and it’s little surprise that investors have opted to take some money off the table.”
Reuters: US military to enforce blockade in Gulf of Oman, Arabian Sea, note to seafarers
The US Central Command have told seafarers that the US military will enforce a blockade in the Gulf of Oman and Arabian Sea east of the Strait of Hormuz, applied to all vessel traffic regardless of flag.
A note seen by Reuters also confirms that the blockade would come into effect at 1400 GMT today, or 3pm UK time.
The note says:
“Any vessel entering or departing the blockaded area without authorization is subject to interception, diversion, and capture.
“The blockade will not impede neutral transit passage through the Strait of Hormuz to or from non-Iranian destinations.”
The blockade “encompasses the entirety of the Iranian coastline to include but not limited to ports and oil terminals”, the note said, adding that humanitarian shipments including food, medical supplies, and other essential goods would be permitted, subject to inspection.
Goldman Sachs warns of 'very complex' geopolitical landscape, as profits rise
Goldman Sachs has grown its profits in the first quarter of this year, a period which included the first month of the US-Iran war.
The Wall Street titan has reported earnings per common share of $17.55 for the first quarter of 2026, up from $14.12 in the first quarter of 2025 and $14.01 in the fourth quarter of 2025.
Goldman’s net earnings rose to $5.63bn for the first quarter to 31 March 31, up from $4.74bn a year ago, while net revenues came in at $17.23bn.
Reuters says:
The heightened volatility across asset classes has pushed up the need for clients to reassess portfolios and hedge downside risks, a practice that typically buoys trading desks at large banks.
The jump in profits was partly due to a 48% jump in investment banking fees, which Goldman says reflected “a significant increase in completed mergers and acquisitions volumes” in the quarter.
Asset & wealth management revenues rose by 10% year-on-year, as an increase in assets under management led to higher fees.
David Solomon, chairman and Ceo of Goldman Sachs, says:
“Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile. Our clients continue to depend on us for high quality execution and insights amid the broader uncertainty, and we remain confident in how we’ve positioned our businesses. The geopolitical landscape remains very complex – so disciplined risk management must remain core to how we operate.”
Updated
The accommodation reservation website Booking.com has suffered a data breach with “unauthorised parties” gaining access to customers’ details.
The platform said it “noticed some suspicious activity involving unauthorised third parties being able to access some of our guests’ booking information”.
“Upon discovering the activity, we took action to contain the issue,” it said. “We have updated the pin number for these reservations and informed our guests.”
The company, which is headquartered in Amsterdam, lists more than 30m accommodation venues around the world and says it connects “millions of travellers” with experiences, transport and places to stay.
UK petrol and diesel increases 'have almost ground to a halt'
After rising since the Iran war began, UK petrol and diesel prices finally all-but-stopped increasing today.
The RAC reports that the average price of a litre of diesel is 191.50p today, up from 191.31p on Friday.
Petrol aso rose very slightly to 158.27p a litre, up from 158.16p on Friday.
RAC head of policy Simon Williams says that “while pump prices have technically risen for a record 43 straight days, the increases have almost ground to a halt” after oil fell traded below $100 a barrel last week.
Williams added, though:
If the oil price was to go back up again this week, any hopes of slight forecourt reductions will inevitably disappear.”
Updated
Physical Forties crude oil hits record high near $150 a barrel
North Sea oil prices have risen to a new record high, as the US plan to blockage the strait of Hormuz triggers a scramble to secure crude supplies.
Reuters has the details:
The price of North Sea Forties crude oil reached a record high near $150 a barrel on Monday as the U.S. plan to blockade the strait of Hormuz added to concern about tight supplies.
The outright price of North Sea Forties crude reached $148.87 a barrel on Monday, LSEG data showed, exceeding its 2008 peak.
Former chancellor Jeremy Hunt has also argued that if the UK introduces a ‘social tariff’ to help poorer households with their energy bills, other households could stump up the cost.
Hunt told today’s Resolution Foundation event that the UK Treasury is “mindful of our fiscal position”, so it will say “we want the people who are not on the social tariff to have slightly higher bills, to pay for lower bills for people on the social tariff”.
That, he argues, would kill the policy “stone dead”.
Hunt says:
It is definitely politically easier for Rachel Reeves to say ‘this is something I’m going to deal with when I come to the budget in November’.
But if the moment she announces a social tariff, she announces that bills for the 80% are going to go up in order to fund lower bills for the 20% of poorer households, that is a way to kill a policy stone dead from the outcome.
You can’t really duck that because people are going to ask, how are you going to pay for this? And that, I think, is why in the end, the quantum is very, very important. I mean, are we talking about a £5bn package for one year, or are we talking about a £25bn package for five years?
Updated
Jeremy Hunt: markets wouldn't allow a repeat of the 2022 energy price cap
Jeremy Hunt, a former Tory chancellor of the exchequer, says Rachel Reeves faces an ‘incredibly challenging’ situation, as the Iran war hits UK living standards.
Hunt, who was chancellor from October 2022 to July 2024, says Resolution Foundation’s new analysis “brought back a few nightmares” for him.
But, when Hunt became chancellor, the energy price cap was predicted to be £4,200; instead, bills were capped it at £2,500 a year, a move that drove up the UK national debt.
Hunt argues that even with all the worries today, the scale of what the UK is facing now is “nothing like 2022”.
We’re talking about potentially a £300 rise in energy bills, not an increase in energy bills by £2,000, or £2,500, a year. So the scale is very, very different at the moment.
Hunt also argues that the markets wouldn’t allow the kind of intervention that he was able to do in 2022.
He says that concerns about the UK’s national debt are higher today:
The markets have noticed that debt interest is now £110bn a year. If you add to that, the unfunded liabilities for civil service and NHS pensions, we pay in tax every year the equivalent of 19p on income tax just to pay for government liabilities, debt, [and] interest.
Updated
Resolution Foundation: pressure on UK housing costs from Iran war
The Iran war is putting rising pressure on UK housing costs, the Resolution Foundation is warning.
The think tank is presenting its new research on the impact on living standards (see earlier post) at an event in London now.
Jonny Marshall, principal economist at the Resolution Foundation, points out that expectations this year of continued interest rate cuts have faded.
Marshall says:
This is very unwelcome news to the nearly three-quarters of a million households that are set to come off five-year fixed mortgages this financial year.
For a household with a loan of around £220,000, moving off a cheap fix would add about £350 to their housing costs, a rise of more than £100 if that cheap fix had ended at the start of February.
There are also expectations that higher mortgage rates could feed through into rental prices, he adds.
Marshall also pointed out that petrol and diesel prices have jumped rapidly, while food inflation will rise more slowly – it typically takes a year for a food commodity price shock to feed through to the peak of food price inflation.
And with households facing a jump in energy bills this year, Resolution argues that any government support should be targeted at those most likely to struggle with higher costs.
Updated
Markets dip 'before Trump inevitably TACOs again'
European stock markets have dropped this morning, but it’s a rather modest sell-off.
Germany’s DAX has dropped by almost 1%, while Spain’s IBEX is down 1.2% and Italy’s FTSE Mib has lost 0.75%.
This mild reaction may indicate that investors aren’t intensely worried about Donald Trump’s threat to close the strait of Hormuz.
As Bill Blain, principal of Wind Shift Capital Advisors, puts it:
More instability forecast before Trump inevitably TACOs again. Markets are getting bored of it – which means the consequences could be even more volatile!
The US blockage on Iranian ports, which is scheduled to start at 3pm UK time, will be a blow to China, which is a key buyer of Tehran’s oil.
Neil Wilson, investor strategist at Saxo UK, explains:
After the ceasefire and move towards peace talks, the failure of negotiations and President Trump’s subsequent decision to impose a naval blockade on the Strait of Hormuz has sent oil prices sharply higher this morning with Brent futures trading north of $100 again.
The US Navy will block the Strait from 10am eastern time today after Washington and Tehran failed to reach agreement over the weekend – I thought we wanted it open!? Brent rose about 8% to clear $103 before paring gains to trade about the $101 mark. Dutch TTF gas jumped about 8% also.
The main thing to consider is China as the main customer of Iranian oil – the blockade appears to be a tool to pressure China to strong arm its strategic partner to hurry up and do a deal. Diplomacy is the continuation of war by other means in this case.
Updated
UK mortgage rates have dipped slightly today.
The average 2-year fixed residential mortgage rate today is 5.89%, down from 5.90% on Friday, data provider Moneyfacts reports.
The average 5-year fixed residential mortgage rate today is 5.77%, down from 5.78% at the end of last week.
That follows a drop in borrowing costs at the end of last week, on hopes that last weekend’s peace talks might have delivered progress.
With government borrowing costs a little higher this morning, it’s possible that tomorrow’s Moneyfacts data will show mortgage rates have gone up again!
Germany will cut taxes on diesel and petrol for two months, chancellor says
Germany is rolling out support for consumers and businesses facing higher motor fuel costs.
Chancellor Friedrich Merz has announced that petrol and diesel taxes will be cut for two months to provide relief to households and businesses hit by the energy shock during the Middle East war.
Merz told a press conference:
We will reduce... the fuel tax on diesel and gasoline by approximately 17 (euro) cents per litre for two months.
Updated
Rachel Reeves said she would set out a support package this week to help businesses struggling with soaring energy costs as a result of the Iran war.
Like other countries, the UK is exposed to the economic fallout from the Iran war, which has driven oil and gas prices sharply higher on world markets, thereby increasing energy bills and fuel prices for households and businesses.
Crude oil prices spiked to nearly $120 a barrel during the war, but fell below $100 a barrel last week after the US and Iran agreed a temporary ceasefire. However, they are expected to rise again on Monday after the two countries failed to reach a deal to end the war over the weekend.
Writing in the Sunday Times, the UK chancellor said:
The war in Iran will come at a cost to British families and business … We don’t yet know the full scale of those costs, but the immediate priority must be to ensure that the ceasefire holds.
She added:
That is the best protection we have against higher costs at home and at the IMF meetings in Washington this week I will be working with allies on the action we can take to guarantee freedom of navigation, including the Strait of Hormuz, to keep energy supplies moving again.
She and other finance ministers, along with central bankers, are heading to Washington for the International Monetary Fund and World Bank’s spring meetings starting on Monday.
The UK government had been waiting to see how the conflict evolved before announcing support to households and businesses. It has already pledged to cut some green levies and lower bills for some electricity-intensive companies. Reeves said:
The UK’s manufacturing sector ... has faced uncompetitive energy prices for too long.
So later this week I will be setting out the next phase of our plans to boost Britain’s competitiveness. I will also set out the principles that will guide how we support businesses in the months ahead.
Updated
Higher energy prices will increase the pressure on central banks to tighten monetary policy, to prevent a surge in inflation.
This morning, City investors are pricing a roughly 84% chance that the Bank of England raises interest rates twice this year, Reuters reports, up from a 60% chance on Friday.
Airline stocks hit by conflict worries and higher oil
Shares in European airlines are dropping in early trading, amid disappointment that the talks between Washington and Tehran broke up without a breakthrough last weekend.
British Airways’ parent company, IAG, are down over 2% this morning, with budget rivals Wizz Air (-6.5%) and easyJet (-3.8%) falling more sharply.
In Germany, Lufthansa has dropped by 4%.
Updated
FTSE 100 drops
London’s stock market has opened with a bump, as traders react to the lack of progress in the US-Iran peace talks.
The FTSE 100 index of blue-chip shares has lost 0.6% at the start of trading, falling by 67 points to 10,533 points.
AB Foods (the grocery, sugar, agriculture, ingredients and retail group) are the top faller, down 2.7%, with airlines, miners, banks and housebuilders all lower.
Energy companies are rallying, though; BP and Shell are both up more than 1%.
Energy shock to wipe out growth in UK living standards
The surge in energy costs from the Iran war will cost a typical UK household almost £500, research from the Resolution Foundation shows.
The Resolution Foundation has esimated that rising energy prices are likely to tip living standards growth into negative territory this year.
That’s because the increased cost of energy bills and petrol at the pump will almost certainly be passed onto households.
The typical household is now likely to see its income fall by 0.6% – a difference of £480 – over the course of the current financial year, it says; before the conflict, households were on track for 0.9% growth.
Average income growth for the poorest fifth this year is now set to be just 1.2%, down from 2.8% before the conflict.
James Smith, chief economist at the Resolution Foundation, says:
Despite hopes for a sustained peace, the path of this conflict remains uncertain and energy prices remain well above pre-war levels, meaning many households face a decline in their purchasing power this year.
This squeeze will run right through the income distribution. Lower-income households will still see some income growth thanks to a long-awaited rise in real benefit levels, but inflation will likely knock more than a percentage point off what they stood to gain. For those in the middle and towards the top of the income distribution, even the thin growth they had been expecting has tipped into negative territory.
Deescalation is certainly welcome, but damage to household finances this year is to a large degree already done. The Government should act now to prepare a social tariff that reaches households falling through the cracks this winter.
Updated
Heathrow airport has warned that the outlook for the next few months is uncertain, due to the ongoing conflict in the Middle East.
In its latest traffic commentary, Heathrow says it is supporting airlines and passengers as they adapt to airspace closures, adding:
The knock-on impacts to global supply chains, including fuel, have not affected airport operations. Heathrow will monitor the situation and liaise with Government and airlines to protect passengers’ journeys.
Updated
The US dollar is rallying as a sharp risk-off move ripples across markets.
The dollar index, which tracks the greenback against a basket of other currencies, has gained 0.35% this morning.
The pound is down half a cent, to just above $1.34.
UK gas price jumps
The price of wholesale gas has also risen this morning.
The month-ahead US gas contract is up 9% to 119.50 a therm, its highest level since last Tuesday (before Donald Trump announced the two-week ceasefire with Iran).
Before the conflict began at the end of February, gas was trading below 80p a therm, before hitting 180p/therm in mid-March.
Analyst: oil remains vulnerable to geopolitical triggers.
Every barrel of risk added to oil markets carries an inflation price tag for the global economy, warns Priyanka Sachdeva, analyst at the broker Phillip Nova:
Oil markets have decisively re-entered geopolitical mode, with prices vaulting back above the psychological $100 per barrel threshold as the United States moved to impose a naval blockade targeting Iranian shipping through the strait of Hormuz.
Both benchmarks, WTI and Brent, opened gap-up and currently hover with almost 8% gains. The market reaction underscores a simple but powerful reality: Hormuz risk is not theoretical; it is structural, and it is real.The latest catalyst came after talks mediated by Pakistan failed to produce a durable agreement, prompting the U.S. to announce enforcement of maritime restrictions on vessels moving to and from Iranian ports. The mere threat of enforcement alone has been sufficient to re-price risk, demonstrating how vulnerable oil remains to geopolitical triggers.
Updated
Only mild losses in Asia-Pacific markets after peace talks break down
The breakdown of US-Iran peace talks last weekend has only led to modest losses in Asia-Pacific markets.
Japan’s Nikkei index is down 0.75%, while Hong Kong’s Hang Seng index and the South Korean KOSPI have both dropped by 1.15%.
Michael Brown, senior research strategist at brokerage Pepperstone, says:
While crude has advanced, and stocks slipped a touch, the overall market reaction to the weekend news of a US Navy blockade of the strait of Hormuz has been relatively contained, as participants view the move largely as a negotiating gambit from President Trump.
While it’s clearly a risk-averse start to the trading week, amid President Trump’s announcement of a Navy blockade in the strait of Hormuz, the general market reaction can be summed up as ‘could be worse’.
Updated
The US blockade of the strait of Hormuz is a blow to the 20,000 seafarers who have been trapped in the Gulf for the last six weeks.
One told us last week:
“I gave my notice exactly one month ago. I’ve informed the master, I’m not willing to sail through the strait. It’s about safety, it’s all about safety.”
Introduction: US blockage threat puts oil back over $100
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
We start a new week, again, with an escalating conflict in the Middle East, after the collapse of US-Iran peace talks last weekend.
Donald Trump’s threat to impose a blockade on the strait of Hormuz has driven the oil price back over $100 a barrel again this morning, as hopes of an end to the conflict soon take another knock.
Brent crude, the international benchmark, has jumped by 7% to $101.88 a barrel, while US crude is up over 8% to $104.69 a barrel – back towards the highs of almost $120 set early in the conflict.
The US president also said he had asked the US Navy to “interdict” any ship that had paid a toll to Iran for passage through the strait, in an attempt to choke off the flow of Iranian oil.
Tony Sycamore, market analyst at IG, says:
By doing so, the US aims to force Tehran’s allies and customers to put pressure on Iran to reopen the vital chokepoint, potentially resolving the impasse without committing ground forces to another protracted conflict.
This approach will undoubtedly strain Iran’s relationship with its largest customer, China. Having already lost Venezuelan supply earlier this year, Beijing now faces the potential loss of another roughly 2m barrels a day.
The war has already driven confidence across Britain’s biggest companies down to a six-year low.
Deloitte’s quarterly survey of chief financial officers has found that concerns around energy prices, inflation and interest rates surging after the Middle East conflict, to its lowest level since early in the Covid-19 pandemic in 2020.
The agenda
2pm BST: Opec’s monthly oil market report
3pm BST: US home sales for March
Updated
