Reeves joins Iran crisis meeting as oil prices soars – Daily Business

Burning oil fields in Iran

Chancellor Rachel Reeves will join an emergency meeting of G7 finance ministers today to consider the economic fall-out from the US-Israel war with Iran.

The oil price soared above $100 a barrel, touching $117.58 overnight and trading at about $108 at 7am.

The G7 meeting will take place virtually at 1.30pm and will be chaired by France, which holds the rotating G7 presidency.

It comes against an escalations of bombing by both sides over the weekend, with energy infrastructure in Iran and across the Gulf being targeted.

Some analysts believe that if there is a shutdown of tanker traffic in the Strait of Hormuz it could see record oil prices above $150 a barrel. Petrol prices are now rising.

Share prices plunged in Asia with South Korea’s KOSPI index falling by more than 6%. Oil’s latest rally follows a 28% jump last week, fuelling concerns of inflationary pressures that could raise living costs. This could also make interest rate cuts less likely.

The Bank of England had been expected to cut interest rates twice before the US and Israel began striking Iran – but now, markets are pricing in just a 40% chance of one reduction.

In a post on Truth Social, US President Donald Trump insisted that the spike would be temporary.

He wrote: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for USA, and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!”

Mr Trump has said he is “not happy” with Iran’s appointment of Mojtaba Khamenei as its new supreme leader. The president last week called for Iran’s unconditional surrender and said he wanted a say in choosing its new leader.

Bahrain said it had highest number of casualties in a single strike on the Gulf states since the war began. A drone attack injured 32 civilians, including four children.

Qatar, Kuwait, the United Arab Emirates and Saudi Arabia also reported attacks overnight. Riyadh said it intercepted and destroyed two waves of drones heading towards a major oilfield. An earlier drone strike hit the US embassy and the State Department has now ordered non-essential government employees to leave the country.

Officials in Iran have warned that they could broaden attacks on regional infrastructure if Israeli and US strikes on their own facilities continued.

The Chinese government’s special envoy for Middle East affairs Zhai Jun said Beijing is willing to work with Riyadh to make “unremitting efforts to maintain peace and stability in the Gulf region”.

Zhai, who described China as a “good friend and partner of Saudi Arabia”, is holding talks with Saudi Foreign Minister Faisal bin Farhan Al Saud and Gulf Cooperation Council (GCC) Secretary General Jasem al-Budaiwi.

In the meeting with Prince Faisal, external on Monday, Zhai expressed “deep concern over the current tensions in the region” and said that the sovereignty, security, and territorial integrity of the Gulf states should not be violated and “any attack on innocent civilians and non-military targets should be condemned”.

Zhai also reiterated Beijing’s call of “an immediate stop to military operations”.

#Reeves #joins #Iran #crisis #meeting #oil #prices #soars #Daily #Business