Clear market uncertainty despite latest Trump attempt to soothe concerns

The latest attempt by Donald Trump to ease uncertainty over the US and Israel's war on Iran has only heightened investor concerns.

The US president's primetime address, saying American forces could leave Iran in two to three weeks, while threatening to strike Iranian electric plants "extremely hard", has caused the fallen oil price to jump again.

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A barrel of benchmark Brent crude oil is now up more than 7% at $107.50 since his comments, having fallen below $100 yesterday. Oil prices impact the cost of petrol and diesel, home heating oil and prices throughout the economy.

It was a similar story with the UK wholesale gas price, which rose more than 6% following Mr Trump's statements. British electricity prices are still tethered to wholesale gas costs.

Asian stock markets were also in the red, with Korea's Kospi and Japan's Nikkei indices posting big falls of more than 4.5% and 2.3%, respectively.

The crux of the worry is of a 1970s-era energy crisis due to the month-long disruption to shipping in the key oil and gas shipping route, the Strait of Hormuz.

More than a fifth of the world's oil and liquified natural gas (LNG) is typically transported through the channel but for the last month, it's been too dangerous and expensive for most tankers to pass.

Iran has attacked many ships making the journey and insurance companies have hiked premiums.

That's meant shipments not getting through from major petrostates of the Gulf, oil and gas storage filling up and energy producers powering down.

Oil and gas production is not easily switched on and off, meaning resuming supply will not be a speedy process.

Impact in the UK

As the dollar rose amid continued uncertainty, sterling fell. Before Mr Trump's announcement, a pound bought $1.33, which dropped to $1.32 this morning. A pound now buys slightly over €1.15, down from €1.16 on Wednesday afternoon.

That means buying dollar-priced goods, such as oil, becomes even more expensive than yesterday.

And after strong rises on Wednesday, the UK's flagship stock index, the FTSE 100 of the most valuable London Stock Exchange companies, shed 0.6%.

Home heating oil prices have remained at more than double pre-Iran war levels, while motoring organisation the RAC said UK petrol and diesel prices in March jumped more than in any previous single month.

Even if the war were to end in a few weeks the membership body for food and drink manufacturers, the Food and Drink Federation, said estimates food inflation will rise to at least 9% by the end of the year.

Latest effort to calm markets

The overnight address by Mr Trump was just the latest in a line of attempts to assuage fears of investors and his voters over the duration and cost of living impact of the war.

In the first week of the war, he said the US Navy could escort ships through the Strait of Hormuz.

After this did not materialise, the Trump administration lifted sanctions on Russian oil so Indian refineries could begin processing the fossil fuel.

Persistently higher oil prices were not lowered by Mr Trump's repeated statements that many of his objectives had been attained and the war would conclude soon.

His suggestion that US troops could seize the major Iranian outlet for oil exports, Kharg Island, also did not move the needle on oil.

(c) Sky News 2026: Clear market uncertainty despite latest Trump attempt to soothe concerns