Key facts
- The FTSE 100 is anticipated to decline due to escalating geopolitical tensions.
- Iran has confirmed the closure of the Strait of Hormuz.
- Brent crude oil prices surged above $84 per barrel.
- The US has reinstated its blockade on Iranian imports.
- One crew member was killed in attacks on two tankers in the Strait of Hormuz.
The FTSE 100 is poised for a decline as escalating tensions in the Middle East lead to a surge in oil prices and the closure of the Strait of Hormuz. Brent crude, the international benchmark, surpassed $84 per barrel, marking over a 10% gain for the week. President Donald Trump announced the US would "takeover" the Strait of Hormuz and impose a 20% fee on all cargo shipped through it, stating the US would become its "guardian angel" and seek reimbursement.
Iran's Islamic Revolutionary Guard Corps has countered, asserting that the crucial shipping lane is "our territory" and vowing to prevent further US interference. The US military conducted strikes in the early hours of Tuesday morning, aimed at diminishing Iran's capacity to attack commercial shipping. The situation has become a physical battleground, with Iranian attacks on two tankers in the strait resulting in one fatality and several injuries, according to the UAE's defence department.