The price of oil moved higher on Tuesday amid caution from investors ahead of Donald Trump’s deadline for Iran to agree to reopen the Strait of Hormuz .
The US president has threatened to launch a major attack on Iranian infrastructure if a ceasefire deal is not reached by 1am UK time on Wednesday.
Global financial markets were tentative ahead of the deadline as a result.
The price of Brent crude oil increased by around 1.5% to 111.4 US dollars a barrel in early trading.
It is around 53% higher than before the conflict started at the end of February, and has resulted in sharp increases in petrol and diesel costs as a result.
Traders are still hopeful a diplomatic breakthrough can be secured but have seen little headway from recent peace talks.
In London, the FTSE 100 opened a touch higher but quickly swung into the red.
It was down 0.1% at 10,426.05 points shortly before 9am.
Elsewhere, the German Dax index was down 0.2% while the French Cac 40 was up 0.4% in early trading.
Richard Hunter, head of markets at Interactive Investor, said: “In the immediate term investors are facing a binary event – ceasefire or further escalation of the conflict.
“Asian markets provided little direction overnight, leading to a subdued UK mood although the main indices made cautious progress in opening exchanges.
“The FTSE 250 remains down by 3.4% so far this year, weighed down by a cocktail of domestic economic issues and the more general risk-off approach which has blighted other global markets.”
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Source: This article was originally published by Evening Standard
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