Oil prices were higher this morning amid rising tension between Iran and the West.
The US has pulled out of the nuclear deal negotiated with Tehran by former President Barack Obama, while Britain has been involved in naval confrontations with Iranian vessels.
With talk of an actual shooting war between America and Iran, in which the UK could become entangled, traders seemed to take the view that oil-supply interruptions were becoming more probable, and so the price was marked up.
Complex factors at play
A month ago, on 17 June, Brent changed hands at $60.94 while WTI was worth $51.93.
A year ago, on 16 June 2018, Brent traded at $71.84 a barrel while WTI was priced at $68.06 a barrel.
The pattern of price movements suggests uncertainty is as big a factor as supply concerns. This may be because of the complex factors behind the current tensions, not all of which are connected.
An Iranian spokesman told the BBC that this action was an “unnecessary and non-constructive escalation” by the British.
One year off a nuclear weapon
With relations between Tehran and London deteriorating, Iranian President Hassan Rouhani said: “You, Britain, are the initiator of insecurity and you will realise the consequences later.”
Both the candidates for the leadership of Britain’s governing Conservative Party have rowed into the debate on Iran.
“Iran is still a good year away from developing a nuclear weapon,” Mr Hunt said. “We think there is still some closing but small window to keep the deal alive.”
HMS Montrose is stationed at the re-opened British naval base in Bahrain, and ministers will now be considering reinforcing it with one or more additional warships.