Brent crude climbed to its highest level since June 2022 on Wednesday as investors reacted to President Donald Trump’s decision to keep the naval blockade of Iranian ports in place until Tehran agrees to nuclear terms. The move sharpened fears that the confrontation around the Strait of Hormuz will remain a prolonged threat to global energy supplies, with oil prices jumping through the session as traders priced in a tighter market.

The Guardian said Brent pushed above $119 a barrel in London trading, while other reports put the benchmark briefly above $120 and, in Axios’s telling, even higher before easing back. The speed of the rise underlined how little confidence markets have in a rapid diplomatic breakthrough. Trump, speaking to Axios, argued that the blockade was more effective than bombing and said Iran could not be allowed to obtain a nuclear weapon.

The pressure was not confined to crude. The day’s moves also lifted gas prices and unsettled broader financial markets, with the FTSE 100 falling to its weakest close since early April and UK two-year gilt yields rising as traders marked up inflation risks. Reuters reported that money markets are now close to fully pricing in three Bank of England rate increases this year, a sign that the energy shock is feeding directly into expectations for monetary policy.

There were also signs that the White House is thinking beyond the immediate squeeze on Iran. According to Reuters, Trump met oil executives to discuss ways of steadying markets if the blockade has to continue for months, including higher US output and fuel supply. That has left traders weighing two competing forces: the prospect of more American production on the one hand, and the possibility of a drawn-out disruption to one of the world’s most important shipping lanes on the other.

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Source: Noah Wire Services