Oil prices surged by more than 5% on Wednesday while global stock markets fell after US President Donald Trump declared the ceasefire with Iran to be over following renewed hostilities in the Middle East.
The latest escalation was triggered by Iranian attacks on vessels transiting the strategically important Strait of Hormuz, raising fresh concerns over global energy supplies.
Ceasefire over
Speaking at the NATO summit in Turkey, Trump said the ceasefire was "over" but left the door open to further negotiations with Tehran.
North Sea Brent crude rose by more than 5% to around $78 a barrel, while US benchmark West Texas Intermediate also gained about 5% to trade near $74 a barrel.
European equity markets came under pressure, with the Paris and Frankfurt stock exchanges falling around 2% by midday. London's FTSE was down nearly 1.5%.
"The geopolitical risks are increasing," said Kathleen Brooks, Research Director at trading group XTB.
Brooks said Brent crude would likely need to climb above $80 a barrel only if tensions escalated further, including the possibility of a renewed US naval blockade of the Strait of Hormuz that would prevent Iran from exporting its oil.
"That would represent a significant escalation of the conflict," she said.
Asian shares also closed lower, as geopolitical uncertainty compounded an ongoing sell-off in technology stocks driven by investor concerns over the scale of spending on artificial intelligence.
Source: CNA
