The US-Iran conflict intensified over the past week, with military actions and diplomatic moves creating uncertainty. US President Donald Trump said he had pushed back the end of a two-week truce following a request by Pakistani mediators, and told the New York Post it was possible that a second round of peace talks could begin by Friday. However, Iran rejected any notion of talks, with state media claiming Trump had backed down, while the Iranian foreign ministry said it had received points from the US through mediators.
The US military said it had destroyed six Iranian small boats in response to attacks on commercial vessels, and the US ambassador to the UN, Mike Waltz, stated that Trump deliberately hit military infrastructure only, for now. Trump also stepped up pressure on allies to join a naval escort mission, and the White House plans to announce that multiple countries have agreed. Meanwhile, Iran launched missiles and drones at Gulf states and Israel, targeting critical infrastructure, and the US military announced the death of another service member, bringing the number killed in combat to seven.
In Iran, more than 1,200 people have been killed by Israeli and American strikes, according to the Iranian Red Crescent Society, while 13 have died in Israel as Iran fired back. Mojtaba Khamenei has been appointed Iran’s new supreme leader, succeeding his father. Global markets reacted sharply to the crisis.
4%. 3%. 3%.
25. The US dollar weakened slightly against the yen and euro. 29%.
UK inflation accelerated in March as higher fuel and heating oil prices pushed up transport and household costs. 1%. The Institute for Fiscal Studies warned that surging oil and gas prices could contribute to a £20bn shortfall in UK public finances, with higher inflation adding up to £10bn to debt servicing costs.
77p. Average energy bills are forecast to rise £288 a year from July. The last shipment of jet fuel from the Middle East to the UK is due to arrive this week, according to Vortexa.
The White House is bracing for oil prices to surge past $150 a barrel, with a potential spike to $200 not ruled out, according to a source familiar with the matter. Officials have entered all hands on deck mode, evaluating options including emergency powers. The US Department of Energy published details of its 172 million barrel contribution to the IEA’s emergency stockpile release, with the first release of 86 million barrels.
Gas prices pushed above $4 a gallon this week. Eurasia Group estimates a 55% chance the war drags on through May, with oil above $150, while Macquarie said oil could surpass $200 if the conflict continues into June. The United Arab Emirates formally exited OPEC and OPEC+, announced on Tuesday and taking effect on Friday.
Oil prices dropped 2-3% following the announcement but recovered. The UAE reported attacks from Iranian missiles and drones, with its air defence systems engaging 12 ballistic missiles, three cruise missiles and four drones. One missile struck a petroleum site in Fujairah, and a drone sparked a fire there.
A drone also struck a Kuwaiti oil tanker in Dubai waters, causing a fire. The UAE has invested over $150 billion in ADNOC to expand capacity. The Strait of Hormuz blockade has disrupted global trade.
Iran imposed a de facto blockade after the war erupted, and about 20% to 25% of the world’s seaborne oil trade moves through the strait. In 2025, about 20 million barrels of oil and oil products passed through daily, according to the EIA. About 20% of global LNG and one-third of fertiliser trade also pass through.
At least 21 vessels have been hit or targeted since the war began, according to AFP, and more than 18 merchant ships have been hit, according to a UAE estimate, with at least eight people killed and four missing. The International Maritime Organisation said up to 20,000 seafarers remain stranded on some 2,000 vessels. The UK Maritime Trade Operations reported a ship struck north of Dubai.
Houthi rebels announced new attacks in the Red Sea, further increasing pressure on trade routes. Oil price volatility continues. Brent crude broke $100 again after a 4% gain, and prices have dipped but remained up over 2%.
Before the US and Israel attack on February 28, the price was around $70 per barrel. 6 million barrels per day, according to Paolo Zanghieri.