Oil soars as Trump vows to hit Iran ‘extremely hard’
The price of oil has spiked by over 7 per cent following Donald Trump’s vow to keep hitting Iran ‘extremely hard’ over the next few weeks, in an address to the nation.
After a 17-minute speech on Wednesday evening, which failed to reassure global markets, Brent crude, the global oil benchmark, jumped 5 per cent to $106 a barrel.
His promise to bomb Iran “back to the Stone Ages” if it didn’t agree to a deal certainly won’t have reassured markets.
The war in Iran, led by the US-Israel, is now expected to last another two to three weeks, despite Trump saying multiple times recently that the war won’t last much longer.
Analysts have said Trump’s speech will send markets into a renewed tailspin.
Chris Beauchamp, chief analyst at IG, commented: “In what might be the most dramatic April Fools’ of recent years, Donald Trump did nothing of what was expected in his speech.”
Instead, it “leaves markets back where they were last week, and now we have to price in hundreds of millions of barrels of oil that aren’t coming out any time soon.”
Global energy crisis
As the Strait of Hormuz, the primary oil export route from the Middle East, remains closed, governments and businesses are growing concerned about an energy shortage.
The European Union is already in emergency mode, with politicians urging citizens to work from home, cut back on driving and avoid flying, while governments in Asia have cut fuel taxes.
South Korean President Lee Jae Myung has urged citizens to “save every drop of fuel”.
However, Downing Street officials have urged Brits to “act as normal”, insisting the government was working through plans to provide guarantees to people.
Gulf countries are now considering returning to costly plans to build pipelines to bypass the Strait of Hormuz for oil and gas exports.