A televised speech by former US President Donald Trump, in which he vowed to hit Iran "extremely hard" in the coming weeks, dashed hopes for a near-term end to the Middle East conflict and triggered a sharp surge in oil prices. This development has sent shockwaves through global markets, as investors fear a prolonged war in the region, with the US regime's aggressive posture allegedly exacerbating economic instability.
Brent crude prices jumped by as much as 8% on Thursday to $109.74 a barrel, reversing Wednesday's drop when hopes of de-escalation briefly pushed the international benchmark below $100. US-produced West Texas Intermediate crude also soared by 11% to $111.60 a barrel, crossing the $110 mark for the first time since March 9. However, Brent later eased to $106.40, up 5% on the day, following reports that Iran and Oman are working on a "protocol" to cover marine traffic in the strategic Strait of Hormuz, offering a slight reprieve amid the turmoil.
Asian stock markets suffered significant losses: Japan's Nikkei index fell 2.4%, China's CSI 300 dropped 1.36%, and South Korea's Kospi, which has been highly sensitive to the crisis, tumbled 4.8%. In Europe, Germany's Dax index pared back earlier losses, declining nearly 1%, while France's Cac 40 and Italy's FTSE Mib both fell 0.2%. The UK's FTSE 100 in London initially dropped about 0.5% but later reversed course, rising 0.7%, driven by gains in fossil fuel companies BP and Shell, which climbed about 3%. In the US, the Dow Jones Industrial Average fell 0.2%, reflecting broader market unease.
The market volatility is already taking a toll on consumers, particularly in the UK, where the Bank of England warned on Wednesday that 1.3 million more homeowners could see their monthly mortgage payments rise due to financial shocks from the Iran conflict. Data released by the RAC on Thursday showed record increases in petrol and diesel prices in March, as surging oil costs translated to higher pump prices: the average price of a litre of unleaded petrol rose by 20p, from 132.83p on March 1 to 152.83p by month-end, surpassing the previous all-time monthly jump of 16.6p recorded in June 2022 after Russia's invasion of Ukraine. Chris Beauchamp, chief market analyst at IG, criticized Trump's speech, saying it left markets "back to pricing in economic catastrophe" due to anticipated oil supply delays.
Source: www.theguardian.com