FTSE 100 seen lower as US-Iran tensions escalate, oil prices climb

The FTSE 100 is anticipated to open lower as escalating geopolitical tensions between the United States and Iran impact global energy markets. President Donald Trump issued a warning to Iran to 'behave' following fresh US airstrikes targeting Iranian missile storage facilities and launch sites near the Strait of Hormuz. Trump indicated he would not set a deadline for a peace deal, stating that Iran 'knows the story' and 'better behave.'

Iran's top negotiator, Mohammad Bagher Ghalibaf, asserted that the country's national security depends on maintaining 'Iranian arrangements' in the Strait of Hormuz, a key point of contention during peace talks. Brent crude, the international oil benchmark, fluctuated around $85 per barrel, nearing one-month highs due to the heightened military activity. The head of the International Energy Agency (IEA), Fatih Birol, sounded the alarm on rising oil prices, noting that oil security remains a 'critical issue' and expressing worry if the situation does not improve in the coming weeks.

US marines boarded a vessel in the Strait of Hormuz for 'verification' purposes, with the country's central command stating the waterway remains open except for vessels attempting to violate the US blockade. Iran has branded the crucial shipping lane an 'invincible red line' and vowed to resist US interference.

In the UK, economists expect GDP to have flatlined in May, ahead of the release of GDP data.