Oil prices rise as Trump's ultimatum on Iran nears
What's the story
Global oil prices have surged in Asia on Tuesday, ahead of a deadline set by US President Donald Trump for Iran to open the vital Strait of Hormuz shipping route. The price of global benchmark Brent crude rose by some 1.4% to $111.33 per barrel while US-traded oil gained 2.8% to $115.61 per barrel.
Diplomatic tensions
Trump threatens to take out Iran
On Monday, Trump threatened to take out Iran "in one night" if it failed to agree on a deal with the US by 8:00pm Washington DC time on Tuesday. He said he believed "reasonable" leaders in Iran were negotiating in "good faith," but the outcome is still uncertain. However, Iran has rejected proposals for a temporary ceasefire, demanding a permanent end to the war and lifting of sanctions against the country.
Shipping crisis
Disruption to shipping in Strait of Hormuz
The disruption to shipping in the Strait of Hormuz has pushed up energy prices globally and raised concerns about higher inflation. The narrow waterway usually sees around a fifth of the world's oil and gas shipments. Major Asian economies like Japan and South Korea have been particularly affected by these disruptions due to their heavy reliance on Middle Eastern energy supplies.