Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The oil price is bubbling upwards this morning after Washington turned the screw on Tehran, with a new crackdown on its energy exports.
In a move with significant geopolitical implications, the Trump administration has decided to end waivers that allow a group of countries to circumvent its sanctions on Iran.
Currently, China, Greece, India, Italy, Japan, South Korea, Taiwan and Turkey can all still buy Iranian oil without risking US reprisals. Those waivers expire at the start of May, and the White House has decided they will not be renewed.
The move is intended to put more economic pressure on Iran, with president Trump concerned that Tehran is still providing support for for terrorist organizations and destabilising the Middle East.
White House Press Secretary Sarah Sanders argues that the move won’t create oil shortages:
“This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue.
“The U.S., Saudi Arabia and the United Arab Emirates, three of the world’s great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied.
However, some analysts fear that the move could rebound. It could upset relations with allies such as India, create further tensions with China, and drive up energy and fuel prices.
Those concerns have already reached the financial markets, where Brent crude has jumped to $74.64 per barrel, up from below $72 last week.
That’s its highest levels since November 2018.
Oil had already spiked once this month, when political instability in Libya raised fears of supply disruption. So, with Opec committed to cutting supplies (to prop up the price), the $75/barrel mark could be breached soon.
Also coming up today
European stock markets are expected to rise a little this morning, as City traders return to work after the Easter holiday break.
Otherwise, it looks like a quiet day, although new US house sales and eurozone consumer confidence data may make ripples
- 3pm BST: US home sales figures for March
- 3pm: Eurozone consumer confidence figures for April