Oil above $100 over conflicting claims on US-Iran talks

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Peter HoskinsBusiness reporter

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NurPhoto via Getty Images

The price of Brent crude oil rose back above $100 a barrel as the direction of the US-Israel war in Iran remained unclear.

On Tuesday, US President Donald Trump continued to float the possibility of a quick end to the conflict, describing Iran as “totally defeated” and Washington was negotiating with Iranian leaders who were “talking sense”.

But Tehran has previously rejected claims that it had been in contact with the US, calling them an attempt to manipulate energy prices and stock markets.

The war has sparked a global energy crisis and the boss of oil giant Shell warned that oil shortages could hit Europe next month.

Global energy markets have seen volatile trading since the US and Israel attacked Iran on 28 February.

Oil and gas prices have soared, as Iran responded by effectively blocking the Strait of Hormuz, a narrow waterway which typically sees about 20% of the world’s oil and liquefied natural gas pass through each day.

Wael Sawan, chief executive of Shell, told an energy industry conference in Houston: “South Asia was first to get that brunt. That’s moved to south east Asia, north east Asia and then more so into Europe as we get into April.”

A spokesperson for the UK’s Department for Energy Security and Net Zero, said: “The UK has diverse and resilient energy supply. We continue to work with partners on the international situation.”

Fears that the conflict was escalating over the weekend helped to send Brent, the benchmark global oil price, to $113 a barrel.

Oil prices had dropped back on Monday after Trump said the US would postpone strikes against Iranian energy infrastructure for five days, citing constructive talks between Washington and Tehran about resolving the hostilities.

By Tuesday, doubts about those discussions sent the price back up to more than $103.

UK businesses said the war in the Middle East has already had an “adverse impact on customer demand, input prices and supply chains” in March. They reported the biggest monthly rise in costs since 1992, according to the S&P Global Purchasing Managers’ Index, a key business survey.

Globally countries have attempted to ease the impact of higher energy prices and supply disruptions.

The US has temporarily waived sanctions on Russian, put in place after the Kremlin in 2022 launched its full-scale invasion of Ukraine. The US also eased sanctions on Iranian oil already at sea.

On Tuesday, China dialled back on planned fuel price hikes in a bid to “reduce the burden” on drivers, as energy costs surge due to the Iran war.

Stock markets have been mixed amid reports that the US was preparing to deploy soldiers to the Middle East.

In the US, all three major indexes slumped, with the S&P 500 ending down almost 0.4%.

In Europe, London’s FTSE 100 closed up 0.72%, Germany’s Dax ended marginally lower and in France, the Cac finished 0.23% ahead.

In Asia, where markets have been rocked in recent weeks due to the region’s dependence on the oil and gas that would normally pass through the strait, key indices posted gains.

Japan’s Nikkei 225 ended up 1.4%, while the Hang Seng in Hong Kong and South Korea’s Kospi both closed more than 2.7% higher.

Oil falls and shares rebound after Trump says talks have been held to end war

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