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Markets slide on Iran tension as oil price spikes above $70

Global stock markets have fallen further amid rising global tensions after the killing of a top Iranian general by the US – and a spike in the price of oil.

The FTSE 100 was down by more than 80 points, or 1%, in early deals though it closed 0.6% – or 47 points – lower at 7575.

The performance was cushioned by a boost for BP, up 2%.

That was after the Iran tensions pushed the price of a barrel of Brent crude above $ 70 for the first time since September though the gains later petered out.

British Airways owner International Airlines Group (IAG) and Ryanair were each off by about 4% though their values later closed 2.5% and 1.6% lower respectively.

Aramco
Image: The Middle East accounts for nearly half of the world’s oil production

Stock markets in Germany, France, Italy and Spain were also in the red on Monday, each losing more than 1% in early trading before also clawing back losses later in the session.

In Japan, the Nikkei was down nearly 2% overnight though other Asian markets were mixed.

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In the US, the Dow Jones Industrial Average fell 0.6% at the opening bell but values later traded flat on the day.

The price of gold, a traditional safe haven during times of market turbulence, climbed to its highest level since April 2013 at one stage.

It came after a US air strike in Iraq killed Iranian commander Qassem Soleimani on Friday, heightening concerns about a widening Middle East conflict that could disrupt oil supplies.

The region accounts for nearly half of the world’s oil production.

The US attack had already pushed the oil price sharply higher on Friday and tensions rose further over the weekend, with US President Donald Trump saying America would strike back “perhaps in a disproportionate manner” if Iran retaliated.

Meanwhile, Iraq’s parliament recommended all foreign troops be ordered out of the country, prompting Mr Trump to threaten sanctions against the country – the second largest producer among the Organisation of Petroleum Exporting Countries.

Monday’s oil price spike saw it climb to just under $ 71 – a level not seen since last autumn when it surged briefly following an attack on a Saudi processing complex.

Iranian protesters gather around a fire during a demonstration against an increase in gasoline prices in the capital Tehran, on November 16, 2019
Iran crisis: How high could oil prices go?

It was later trading just above $ 68.

The US-Iran tensions have dampened initial hopes for a rally in global shares this year on the back of an imminent trade deal between American and China.

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Business News – Markets reports and financial news from Sky

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