Oil back above $100 as US to blockade Iranian ports after peace talks fail

BBC:

Oil prices rose back above $100 a barrel as energy markets reopened in Asia on Monday after talks between the US and Iran ended without a new deal and President Donald Trump said he would blockade Iranian ports.

Global benchmark Brent crude is up by 8.5% at $102.37 (£77.15), while West Texas Intermediate is 9% higher at $105.34.

The failure of negotiations at the weekend has raised concerns that the global energy crisis will deepen.

The price of oil plunged well below $100 last Wednesday after Washington and Tehran agreed to a conditional two-week ceasefire deal that includes the opening of the key Strait of Hormuz trade waterway.

The strait, through which a fifth of the world’s energy shipments pass, has become a key flashpoint of the Iran war after Tehran retaliated against the US-Israeli strikes by threatening to attack vessels that try to use it.

Shipments have largely been at a standstill since the conflict started on 28 February, though some countries like India and Malaysia have negotiated safe passage for their vessels.

The disruption has led to energy prices surging around the world.

Major stock indexes in Asia slipped in morning trade on Monday.

The Nikkei 225 in Japan fell by 0.8%, while South Korea’s Kospi was down by 1.8%.

Countries in Asia have been hit especially hard by the fallout of the Iran war as they are heavily reliant on oil from the Middle East.

US stock futures also pointed to a lower open for Wall Street shares.

Stock futures are an agreement between investors to buy or sell an asset at a certain time in the future at a set price and can indicate the direction of a market.

Energy prices and financial markets around the world have seen big swings in recent weeks as investors react to developments in the conflict.

Brent crude slid to about $90 a barrel on 8 April after the US and Iran agreed a conditional two-week ceasefire that included the reopening of the Strait of Hormuz.

Prices have been volatile since then as doubts grew over whether the ceasefire would last and as Israeli strikes on Lebanon continued.