Oil prices spiked on Thursday after President Joe Biden appeared to say that the United States could back reprisal strikes by Israel against Iran’s oil facilities.
Backed by the UK Government, Mr Biden has urged Israel against hitting Iranian nuclear sites in retaliation for a volley of ballistic missile strikes by Tehran this week.
However, asked if the US could support Israel hitting back by attacking oil facilities in Iran, the president told reporters: “We’re discussing that.
“I think that would be a little - anyway,” the 81-year-old president said, his voice trailing off.
The remark sent Brude crude prices surging 5% over $77 before they settled back at about $76.80 in late afternoon London trading.
The UK Government earlier joined President Biden in urging Israel against hitting Iranian nuclear sites.
Government minister Sarah Jones said Britain supported Israel’s right to self-defence.
But she added on Sky News: “I think we would call for proportionality in the same way that President Biden has, and he has been talking to all the G7 countries.”
Sir Keir Starmer joined the president and other G7 leaders on a call on Wednesday following Iran’s attack on Israel, with the allies issuing a joint statement that urged restraint on all sides.
"Expressing strong concern over the escalation in recent hours, it was reiterated that a region-wide conflict is in no one's interest and that a diplomatic solution is still possible," the G7 leaders said, while condemning Iran.
Israel is warning of a strong response to Iran’s firing of some 180 ballistic missiles, which were largely deflected by its Iron Dome defence shield.
But when asked whether the US would back Israel hitting back at Iran’s nuclear sites, President Biden said earlier: “No.”
He told reporters: "We'll be discussing with the Israelis what they're going to do, but all seven of us (G7 nations) agree that they have a right to respond but they should respond proportionally."
Ms Jones said: “Of course, we understand that after the attacks from Iran, Israel has a right to defend itself, but we want that to be proportionate and we want to make sure that we are doing all we can in our role through diplomacy to de-escalate.”
Tehran’s attack came after Hassan Nasrallah, the leader of the Iranian-backed militia Hezbollah in Lebanon, was assassinated by Israel on Friday. That followed the killing of dozens in Lebanon including Hezbollah members when booby-trapped pagers and walkie-talkies exploded.
Months of border clashes with Hezbollah since the Hamas-Israel war in Gaza started a year ago have seriously escalated, with Israeli forces crossing into southern Lebanon. On Wednesday, eight Israeli soldiers were killed in the fighting.
Lebanon’s ambassador to the UK, Rami Mortada, accused Israel of opening a “Pandora’s box” in the Middle East.
“We were on a track trying to discuss a diplomatic alternative … but the hotheads in Israel chose a different path,” he told BBC Radio 4’s Today programme on Thursday.
The ambassador denied that Hezbollah, which forms part of the government in Lebanon, had been committing violence with near-daily rocket attacks that have forced some 60,000 people to flee their homes in northern Israel.
“I condemn any act of violence but Hezbollah has not been committing violence... they were firing exclusively at military targets,” he claimed.
Coventry South MP Zarah Sultana, who lost the Labour whip for rebelling against the Government in a vote on child benefit, claimed that “many” Labour MPs agreed with her vocal criticism of Israel but were too afraid of also losing the whip to speak out.
“Many do because we are seeing death of 41,000 Palestinians in Gaza,” she said on Today.
“We are seeing death in Lebanon and we know the UK Government could take a different route where it prioritised lives, treated them all equally and ended all arms sales (to Israel).”
A month ago, the Labour Government suspended about 30 licences for arms exports to Israel over fears that the weapons were being used to violate international humanitarian law in Gaza.
But it continued with more than 300 other licences including for UK-built components used in the F-35 fighter jet.
