Key facts
- President Donald Trump threatened Iran with unprecedented economic sanctions.
- The threat comes amid ongoing conflict over control of the Strait of Hormuz.
- Oil prices remained above $91 per barrel.
- The UAE has suspended financial and economic transactions with Iran.
- Crude oil inventories rose last week, while distillate stocks fell.
The FTSE 100 experienced a shaky trading session as President Donald Trump issued a stark warning of initiating the "most crushing economic operation ever taken against any country" against Iran. The escalating tensions, particularly concerning control over the Strait of Hormuz, have kept oil prices elevated, holding above $91 per barrel.
In a statement on Truth Social, Trump asserted that Tehran had "failed to take" a deal, prompting his threat of "economic warfare and isolation on an unprecedented scale." He further warned that any nation providing support to Iran would face "tremendous economic consequences."
The United Arab Emirates has already responded by suspending financial and economic transactions with Iran, citing accusations of ballistic missile launches by Tehran towards its territory. The recent end of a 60-day ceasefire between the US and Iran has added to the geopolitical uncertainty, with Tehran describing the future of any agreement as being in a "coma."
Market data from the International Energy Agency indicated a rise in crude inventories by 4.4 million barrels last week. However, distillate stocks saw a decline of 1.5 million barrels, reaching their lowest level in over a month.