Key facts
- FTSE 100 futures suggest a 19-point drop at Monday's open.
- US President Donald Trump has paused strikes on Iran.
- Diplomatic efforts are underway to manage shipping through the Strait of Hormuz.
- An oil tanker exploded in the Strait of Hormuz after hitting a naval mine.
- Brent crude oil prices reached a two-month high of $100 per barrel last week.
FTSE 100 futures indicate a 19-point, or 0.18%, drop at Monday's market open. This follows a week of heightened Middle East tensions, including exchanges between Iran and the US, and threats from the Houthis regarding the Red Sea. Brent crude oil prices surged to a two-month high of $100 per barrel on Thursday before falling slightly on Friday. Despite broader market caution, the FTSE 100 managed a 1.3% gain over the past week.
US President Donald Trump announced over the weekend that he is pausing strikes on Iran as an Omani delegation pursues talks to manage shipping transit through the Strait of Hormuz. An oil tanker reportedly exploded in the Strait on Sunday after hitting a naval mine, according to Iran's semi-official Tasnim news agency.
The Bank of England's Monetary Policy Committee is widely expected to hold interest rates on Thursday, with oil prices a key factor influencing future rate decisions. Thomas Pugh, chief economist at RSM UK, suggested that if oil prices remain near $100 per barrel, a September rate hike could be considered.