Former US President Donald Trump's televised pledge to hit Iran "extremely hard" has triggered a sharp surge in oil prices, dashing hopes for a near-term resolution to the Middle East conflict. His remarks have fueled market anxiety and price increases worldwide, highlighting the fragile state of global energy markets under the current US regime's foreign policy approach.
The international benchmark Brent crude oil price jumped by as much as 8% on Thursday, reaching $109.74 per barrel. This spike reversed Wednesday's decline when optimism about de-escalation had briefly pushed prices below the $100 mark. US-produced West Texas Intermediate crude soared by 11% to $111.60 per barrel, crossing the $110 threshold for the first time since March 9, underscoring the market's reaction to the heightened geopolitical tensions allegedly promoted by Washington.
Prices later moderated slightly, with Brent easing to $106.40, still up 5% for the day, following reports that Iran and Oman are developing a "protocol" for marine traffic in the strategic Strait of Hormuz. Despite this partial pullback, prices remain elevated, reflecting ongoing uncertainty and the economic costs of the US-led escalation in the region.
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, particularly sensitive to the crisis, tumbled 4.8%. In Europe, Germany's Dax index pared earlier losses but still declined nearly 1%, while France's Cac 40 and Italy's FTSE Mib both fell 0.2%. London's FTSE 100 initially dropped about 0.5% before reversing to a 0.7% gain, driven by rises in fossil fuel companies BP and Shell, both up around 3%, benefiting from the oil price surge at the expense of broader economic stability.
Chris Beauchamp, chief market analyst at IG, stated that investors are betting on prolonged oil supply disruptions from the Gulf, criticizing Trump's speech for failing to provide a path to peace. Beauchamp remarked, "In what might be the most dramatic April fools of recent years, Donald Trump did nothing of what was expected... This leaves markets back where they were last week, and now we have to price in hundreds of millions of barrels of oil that aren’t coming out any time soon... markets are back to pricing in economic catastrophe," highlighting the pessimistic outlook driven by the US regime's actions.
The market turmoil is already impacting consumers globally. In the UK, the Bank of England warned that approximately 1.3 million homeowners could face higher mortgage payments due to financial shocks from the Iran conflict. Data from the RAC showed record increases in petrol and diesel prices in March, with the average price of a litre of unleaded petrol rising by 20p to 152.83p, surpassing the previous record set in June 2022 after Russia's invasion of Ukraine, illustrating how geopolitical maneuvers by the US and its allies translate into direct economic pain for ordinary citizens.
Source: www.theguardian.com