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Thanks for following along with our coverage of the war in the Middle East after Donald Trump warned that Iran’s “whole civilisation will die tonight”. The US President has given Iran a 8pm EST (1am BST) deadline to reopen the Strait of Hormuz, and threatened to destroy Iran’s infrastructure if it fails to comply.
You can keep up to date with the latest here.
FTSE slips as markets brace for Trump’s deadline
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Britain’s FTSE 100 fell slightly on Tuesday as investors prepare for Donald Trump’s latest deadline in the Iran war.
The US President warned that “a whole civilisation will die tonight” if the country does not agree to reopen the Strait of Hormuz by 8pm EDT (1am BST).
The FTSE 100 closed down 0.8pc, while the FTSE 250 fell 0.4pc after an otherwise quiet day. Senior Plc, a Hertfordshire-based manufacturing firm, rose 0.5pc after agreeing a 300 pence-per-share offer from several private equity firms including Blackstone and Tinicum.
New York stocks fell harder, with the Dow Jones Industrial Average and the S&P 500 both down 0.8pc, and the Nasdeq Composite was 1.2pc lower.
Brent oil rose to $110.24 a barrel on Tuesday afternoon, compared to $106.75 at close in London on Thursday.
Devon ‘war metal’ mine to boost Britain’s rearmament
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One of the largest tungsten deposits in the world is set to be mined in Devon as the Middle East crisis turbo-charges demand for the critical “war metal”.
The Hemerdon mine, near Plymouth, was discovered in 1867 and exploited through both world wars, as well as briefly from 2015 to 2018, before it was closed because of a lack of funds.
Now the site is being developed again by Tungsten West, with the wars in Ukraine and Iran triggering a surge in demand for munitions.
Tungsten West is hoping to begin production of small amounts at Hemerdon later this year before ramping up to full capacity by 2027.
At peak production, the London-listed company estimates the site will produce around 3,300 tonnes of tungsten concentrate per year – or around 20pc of global supplies outside China.
That is enough to meet about a third of all defence-related demand globally.
Analysts have described the Devon deposits as among the largest untapped tungsten resources in the world.
Once fully up and running, the project – which will conduct mining operations for about 11 years – is expected to support more than 300 permanent jobs and generate hundreds of millions of pounds in economic value.
European gas prices soar as Trump’s deadline looms
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European natural gas prices surged amid reports that Iran had stopped negotiating a potential ceasefire, hours ahead of Donald Trump’s deadline for the country to reopen the Strait of Hormuz.
Headline price jumped by 7pc after the New York Times reported that Iran had stopped engaging with the US, citing three senior Iranian officials. Iran denied diplomatic channels had been closed in a statement published in the Tehran Times, a newspaper tied to the regime.
Contracts had been volatile throughout the day as traders awaited the outcome of the talks. Iran has yet to allow a single carrier loaded with liquefied natural gas through the Strait since the war began.
Analysts at Inspired Plc said Trump’s threat to destroy Iran’s power and transport infrastructure “has added a further layer of geopolitical risk” to already-fragile energy markets.
Housebuilding slumps as war hammers supply chains
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Housebuilding activity across Britain is in freefall as the Iran war drives up the cost of building materials and hammers buyers’ confidence.
Construction on projects with new homes plunged by nearly 30pc in the first three months of the year, findings by construction data provider Glenigan show.
Allan Wilen, economics director at Glenigan, said the outbreak of the conflict between Iran and the US and Israel has compounded existing cost pressures on builders.
He added that the closure of the Strait of Hormuz is expected to prolong supply chain disruption well into the second half of 2026.
Mr Wilen said: “The Iran war will depress activity further near-term as private developers and house-purchasers delay investment decisions due to fears of higher than anticipated interest rates, rising material costs, spiralling energy costs and stalled economic growth.”
US stocks fall after Trump’s threat to end Iranian ‘civilisation’
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US shares dived on Tuesday as investors took fright at Donald Trump’s threat that a “whole civilisation will die tonight” unless Iran agrees to America’s demands.
The S&P 500 opened down 0.5pc, ending a brief recovery enjoyed by investors last week. The tech-heavy Nasdaq Composite dropped 0.6pc as trading kicked off on Wall Street and the Dow Jones lost almost 0.7pc.
US equities dropped across the board as hopes faded that Mr Trump’s late-night deadline for a breakthrough in talks with Iran would yield results.
Instead, the president issued fresh threats in a post on Truth Social, while Iranian officials reportedly refused to bow to any demands without a “lasting peace”.
Saudi Arabia’s Jubail petro plant hit by Iran
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Saudi Arabia’s Jubail petrochemicals plant, a multi-billion dollar energy complex, has been struck by missiles fired by the Iranian Revolutionary Guard Corps, according to video footage verified by Reuters.
The IRGC said the attacks were “in response to the enemy’s crimes in the aggression” against Iran’s Asaluyeh plant, which was also struck overnight.
The Iranian forces said they had “effectively targeted with medium-range missiles and several suicide drones” the Sadara complex, part of a $20bn joint venture between Saudi Aramco and Dow, Reuters reported.
The Saudi ministry of defence said it had conducted the “interception and destruction of 7 ballistic missiles launched toward the eastern region, with debris from the ballistic missiles falling in the vicinity of energy facilities, and damage assessment ongoing”.
Hungary to agree to buy US oil in talks with JD Vance
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Hungarian officials are in talks with the US over a deal to buy up to $500m of American oil as part of a visit by US vice president JD Vance to Budapest.
The country’s energy company, Mol Nyrt, will buy about 500,000 tons of US oil, according to Bloomberg. Hunary has already been increasing its purchases of Russian oil after receiving sanctions exemptions.
At a press conference in Hungary on Tuesday, Mr Vance said of Iran: “I hope they make the right response.”
“They’ve got to know, we’ve got tools in our toolkit that we so far haven’t decided to use. The president of the United States can decide to use them, and he will decide to use them if the Iranians don’t change their course of conduct.”
Russia eyes ‘new opportunities’ from Iran conflict
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The disruption to global supply chains from Iran’s closure of the Strait of Hormuz has led created “new opportunities” for Russian industry, the country’s Prime Minister Mikhail Mishutin has said.
As the Kremlin grapples with economic devastation from its costly invasion of Ukraine and Western sanctions, Mr Mishustin said Russia was looking to boost its exports of scarce resources during the crisis.
“For our country, the current situation - if we consider exclusively the economic aspects - creates new opportunities to improve the financial position of export-oriented industries and to provide additional budget revenues,” he said, according to Reuters.
“Our country has the capacity to increase overseas shipments of resources that are currently scarce due to the Middle East crisis, or that may become scarce in the near term, including food-related supplies.”
While Russia’s oil shipments have suffered under Western sanctions, the surging price of oil is expected to bolster the Kremlin’s coffers.
‘A whole civilisation will die tonight’, Trump warns
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Donald Trump has warned that a “whole civilisation” could be destroyed as the US threatens further strikes on Iran if its leaders refuse to America’s demands.
In a post on Truth Social, the US President said: “I don’t want that to happen, but it probably will.
“However, now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily [sic] wonderful can happen.
“WHO KNOWS?”
Oil continued to trade higher on Tuesday afternoon. West Texas Intermediate climbed back towards monthly highs of around $116, reversing an earlier decline.
Oil spikes after reports of strike on Kharg Island
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Oil prices have rebounded after dropping earlier in the morning with Brent crude back above $110 after a series of reports of strikes on Iran’s strategic Kharg Island.
A series of explosions were reported on Kharg Island, Iran’s main oil terminal that accounts for 90pc of its crude oil exports, according to Iranian state media and others.
The Mehr news agency claimed on Telegram that the “enemy has carried out several attacks on Kharg Island, and several explosions have also been heard on the island”.
Brent crude has fallen below $108 in earlier trading this morning, but has swung back up as hopes for a deal between the US and Iran fade.
US futures plunge as hopes of ceasefire deal fade
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US futures dropped on Tuesday as reports emerged playing down the prospect of a late-night agreement with Iran to reopen the Strait of Hormuz.
The Dow Jones Industrial Average dropped by about 200 points - or 0.4pc - in pre-market trading on Tuesday. The S&P 500 also lost about 0.5pc, wiping out earlier gains.
The fall came on the back of a Wall Street Journal report claiming negotiators are “pessimistic” about the prospects of a deal to de-escalate the war with Iran ahead of Donald Trump’s deadline tonight.
Separately, Reuters reported that a senior source in the Iranian regime had rejected any talk of a temporary ceasefire. Reuters said Iran’s conditions for a “lasting peace” were a halt to strikes and compensation. Iran was also seeking to impose fees on ships in the Strait of Hormuz.
Diesel prices nearing 190p per litre, says RAC
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The price of diesel is on the cusp of 190p per litre, closing in on record highs set in June 2022, according to the RAC.
Average petrol prices jumped over the Easter weekend by 2.6p to 157.02p, according to the group, while diesel was just under 190p and 9p shy of a record.
Simon Williams, head of policy at the RAC, said: “While the four-day Easter weekend will have been a good break for many, it’s proved bad for fuel prices with both petrol and diesel going up significantly yet again. Over the course of the bank holiday petrol went up 2.6p a litre to 157.02p and diesel by 4.2p to 189.42p. Diesel looks set to go through the 190p-a-litre mark on Wednesday which would then mean it’s only 9p away from the record high set on 25 June 2022 (199.09p).
“Drivers - particularly those who rely on diesel which is up by a third since the start of the conflict - are facing a torrid time, even with the current 5p-a-litre duty discount in place. Many will no doubt be looking to the Government to go further to ease the pain they’re experiencing at the pumps.”
EV sales hit record high as petrol prices soar
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Drivers bought a record number of electric vehicles (EVs) last month as war in Iran sent fuel prices soaring.
The number of EV registrations hit 86,120 in March, according to the Society of Motor Manufacturers and Traders (SMMT), up from 69,313 a year earlier. The March total is the highest ever monthly figure.
The increase came as petrol and diesel fuel prices jumped by a record amount last month, as the Iran conflict convulsed global oil supplies.
Against this backdrop, more drivers have been searching for information online about EVs because of their lower running costs, separate data showed.
Google searches for “electric car” and “electric vehicle” rose by 17.5pc between February and March, consultancy New Automotive said.
Ian Plummer, of Autotrader, said interest had “picked up sharply as fuel prices rise”, with the company experiencing the equivalent of one new EV enquiry every minute online.
He added: “If that online intent converts into sales, progress will follow.”
Gamblers ramp up bets on ceasefire
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Speculators on crypto betting sites such as Polymarket have nudged up their bets on a potential ceasefire between the US and Iran.
On Polymarket, the odds of a ceasefire by the end of the month increased as high as 32pc on Tuesday morning. That was up from around 18pc over the weekend.
The odds of a ceasefire by June, meanwhile, climbed to 59pc after dropping as low as 45pc over the weekend.
Britain faces ‘stagflation’ from oil surge
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Britain faces “stagflation” as the Iran war sends oil prices spiralling and undermines economic growth, according to a survey of businesses.
Growth in the services sector, which makes up the bulk of the UK economy, slowed in March to its weakest since last April, according to S&P Global’s purchasing managers’ index (PMI).
New business dropped as customers slashed orders, costs surged on higher energy and transport bills, and prices charged jumped as companies sought to pass the costs on to clients.
“Stagflation risks appear to have increased, with the final Services PMI data signalling slower growth and higher cost pressures,” said Tim Moore, economics director at S&P Global.
“Service providers widely commented on fragile domestic economic conditions and concerns about the impact of rising inflation and higher borrowing costs on client demand over the year ahead.”
The dreaded combination of stagnating output and surging prices raises the prospect of a return to the 1970s, when repeated oil price crises stemming from the Middle East hammered western economies.
Stagflation is particularly tough for central banks to handle, as raising interest rates to hold down inflation further smashes growth. Financial markets are betting the Bank of England will raise interest rates twice this year, from 3.75pc to 4.25pc.
Thomas Pugh, chief economist at RSM UK, said the country could even face recession from the jump in energy prices and borrowing costs.
“The UK is in for another bout of stagflation, even if the conflict ends soon. If it drags on longer, a recession looks likely,” he said.
“The length of the conflict and clear impact on output prices makes it more likely that the Bank of England will hike this year.”
Trading among ‘most volatile’ since conflict began
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Traders are braced for sharp swings in prices and sentiment today as the market watches for any signs that Donald Trump’s ceasefire proposals are on the rocks.
Oil swung lower this morning, dipping to $108 for a barrel of Brent crude, down 1.6pc for the session. The renewed optimism comes despite warnings that the US could launch fresh strikes on Iranian power plants and bridges if talks fail.
“Markets remain torn between escalation fears and ceasefire hopes. While some relief may be warranted as the war in Iran did not escalate further over the long Easter weekend, Trump’s extended Tuesday night deadline is still looming large,” Hauke Siemssen, rates strategist at Commerzbank, said.
“Investors are positioning carefully rather than fully pricing in a worst-case scenario,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
“Either way, today has the potential to be one of the most volatile trading sessions since the conflict began, with any headlines likely to drive meaningful swings across global markets.”
Oil prices dip as Trump’s deadline looms
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Oil prices have dropped a touch this morning despite a series of fresh strikes on Iran overnight.
The price of Brent crude dropped as low as $109, down from $111 earlier in the session, while West Texas Intermediate fell from monthly highs of $115 down to around $112.
The dip came as investors broadly turned more positive with the FTSE 100 up 0.4pc and the FTSE 250 now over 0.8pc higher in early trading. S&P 500 futures have also parred back their losses.
The fall comes despite Israel issuing a warning to Iranians to stay away from the country’s rail network after Donald Trump warned he could “wipe out” the country’s infrastructure.
In a message on Farsi channels, Israeli forces said: “Presence on trains and near railway lines endangers your life.”
Iran war shock slams brakes on European growth
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The Iran war has slammed the brakes on the eurozone’s economies, according to an influential survey of businesses.
Growth collapsed in March, according to S&P Global’s purchasing managers’ index (PMI) as companies across the continent face surging costs and slumping demand.
The PMI slowed to 50.7 - its weakest in nine months - and the services index slumping to 50.2. A score of 50 indicates no growth on the month, so this indicates near-stagnation in the private sector.
France and Italy both suffered a contraction in their services industries, though Spain appears to have escaped the worst effects as its businesses reported accelerating growth.
Companies have already cut back hiring with investment likely to be the next to fall as pessimism grows.
Input prices are rising at their fastest in more than three years, threatening a fresh wave of inflation and higher interest rates across the bloc.
“The near-stalling of growth in March drags the PMI’s signal for first quarter GDP growth down to 0.2pc,” said Chris Williamson, chief business economist at S&P Global.
“More worrying is that there are clear risks of the economy contracting in the second quarter unless there is a swift resolution to the conflict, and even then we will likely see damaging energy market repercussions extending into the coming months.”
Oil crisis worse than 1973, 1979 and 2002 combined, says IEA
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The Iranian oil and gas crisis is “more serious than the ones in 1973, 1979 and 2002 together”, the head of the International Energy Agency (IEA) has warned.
“The world has never experienced a disruption to energy supply of such magnitude,” Fatih Birol, the executive director the agency, told France’s Le Figaro newspaper.
Iran blocks two Qatari tankers in Strait of Hormuz
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Two Qatari gas tankers that had been cleared to leave through the Strait of Hormuz were turned back by the Iranian Revolutionary Guard Corp, according to Reuters.
The liquefied natural gas vessels, the Al Daayen and Rasheeda, both performed u-turns in the strait after previously being told they could leave the Persian Gulf from Qatar’s Ras Laffan oil depot, tracking data from MarineTraffic showed.
A source told Reuters the ships had been due to depart as part of talks with Iran via Pakistan, but the ships were ordered to halt.
“This was part of an arrangement negotiated as part of talks spearheaded by Pakistan last week,” a source said. The Al Daayen was signalling its destination as China on Monday.
— MarineTraffic (@MarineTraffic) April 7, 2026LNG carriers abort Strait of Hormuz transit attempt
Two Qatari-laden LNG carriers attempting to exit the Middle East Gulf via the Strait of Hormuz have reversed course, underscoring continued disruption to global gas flows.
According to #MarineTraffic data, the 148,853-cbm LNG… pic.twitter.com/qrAztYHoiy
FTSE 100 opens up as markets await Trump deadline
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The FTSE 100 has opened up about 0.1pc in early trading at about 10,444, led by small bumps for Scottish Mortgage and BP. The FTSE 250 enjoyed a 0.4pc uplift in early trading led by shares in Pantheon Infrastructure.
Traders buyers face “exceptional premium” for physical oil
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Oil buyers are facing huge premiums for real-world oil barrels with prices surging to their highest levels since 2008, according to analysts at Morgan Stanley.
The price of Dated Brent - which tracks the price of physical oil barrels in the North Sea - climbed above $141 over the Easter weekend, S&P analysts reported over the weekend. That is the highest level since the financial crisis.
Martijn Rats, an analyst at Morgan Stanley, said in a note on Tuesday buyers were now swallowing “an exceptional premium for secure, refinery-usable Atlantic Basin barrels available now”.
The cost is now well ahead of the prices being factored in to oil futures markets. Mr Rats said: “Different parts of the complex are pricing different combinations of immediacy, tightness and expected persistence.”
According to Bloomberg, the analysts said: “Stress is appearing first in the part of the benchmark that is closest to the immediate physical problem.”
FTSE futures edge higher
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FTSE 100 futures climbed 0.2pc in pre-market trading on Tuesday after the long weekend, while US futures were down 0.5pc.
Elsewhere this morning, in European markets, Bill Ackman’s Pershing Square has launched a €9.4bn takeover bid for Universal Music, the production company helmed by Sir Lucian Grainge.
Trump again floats seizing Iranian oil
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Matthew Field taking over from Chanel in London this morning.
Donald Trump used Monday’s press conference at the normally upbeat White House Easter egg roll to threaten to seize Iran’s oil reserves, although he suggested the move would be unpalatable to the American public.
Speaking to reporters, Mr Trump said: “If I had my choice, what would I like to do? Take the oil, because it’s there for the taking. There’s not a thing they can do about it.
He added: “Unfortunately, the American people would like to see us come home. If it were up to me, I’d take the oil, I’d keep the oil. I would make plenty of money.”
Mr Trump previously extended America’s influence over global oil flows following the ousting of Nicolas Maduro from Venezuela, striking a deal with the new leadership over its reserves.
However, this morning Bloomberg reports, citing White House sources, that there are currently no plans to assert control over Tehran’s oil or energy assets as part of ceasefire efforts.
At Monday night’s conference, Mr Trump said the US proposal included measures to ensure the “free traffic of oil and everything”. He also floated the idea of charging tolls for ships entering the Strait of Hormuz.
North Sea gas ‘saves Britain billions a year’
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North Sea natural gas has been found to have saved Britain billions last year, increasing pressure on the Government to boost production during the Iran war.
Tapping into its own resources of offshore gas instead of paying for imported liquefied natural gas (LNG) shipments saved the UK about £2.5bn last year, according to analysis from investment bank Stifel.
The bank said savings on UK-produced gas would be “substantially higher” this year because prices have surged during the Middle East conflict.
Gas prices have soared by 56pc since the start of the war as the threat of strikes has deterred tankers from passing through the Strait of Hormuz, where a fifth of global exports usually pass.
Read the full story here
Trump’s ultimatum fuels market panic
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Donald Trump warned Iran could be “taken out” if it did not meet his deadline for a ceasefire deal, vowing to destroy Iranian power plants and bridges.
“Any follow-through on threats to target Iran’s power infrastructure would mark a significant escalation, raising the risk of retaliatory action that could further disrupt Gulf energy facilities,” said Vasu Menon, managing director of investment strategy at OCBC in Singapore.
The conflict has spurred worries about stagflation – high inflation with weak or slow growth – upending the global rates outlook, with traders no longer pricing in any rate cuts from the Federal Reserve this year.
US inflation data is due later this week, but for now investor attention remains on Mr Trump’s war deadline and whether a deal will be agreed.
“Clock-watching is now playing almost as big a role in oil markets as the fundamentals themselves in the run-up to Trump’s ultimatum deadline,” said Tim Waterer, chief market analyst at KCM Trade.
“The potential for a ceasefire deal offers some counterweight and could spark a relief move lower if it gains traction, but persistent supply worries from the Hormuz chokepoint and damaged energy facilities are keeping the floor under prices.”
UN to vote on Strait of Hormuz resolution
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The UN Security Council is set to vote on Tuesday for a resolution addressing Iran’s threats to the Strait of Hormuz, diplomatic sources told AFP.
The latest draft demands that Iran end its attacks on commercial vessels and halt “any attempt to impede transit passage or freedom of navigation in the Strait of Hormuz”.
But objections from several veto-holding permanent members have seen the text watered down and the latest draft does not expressly authorise force.
Tehran has virtually closed the key waterway since US-Israeli strikes hit Iran on February 28, sending global oil and gas prices soaring.
World not prepared for interest rate shock, warns JP Morgan boss
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The global economy will be rocked by an even bigger interest rate shock than expected from war in Iran, JP Morgan’s boss has warned.
Jamie Dimon, head of the world’s biggest bank, said on Monday that borrowing costs could be forced higher as the conflict in the Middle East pushes up oil prices.
“Because of the war in Iran, we face the potential for significant ongoing oil and commodity price shocks, along with the reshaping of global supply chains,” Mr Dimon said in his annual letter to shareholders.
This “may lead to stickier inflation and ultimately higher interest rates than markets currently expect”, he added.
Read the full story by Eir Nolsøe here
Good morning
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Thanks for joining me.
5 things to start your day
1) Factory bosses warn 25,000 jobs at risk from Reeves’s business rates blow | Tax rise ‘will hammer’ manufacturing industry at a time when energy prices are soaring, trade body says
2) Gail’s in talks to stock The Observer after Guardian anti-Semitism row | Move suggests a divergence in political viewpoints between the Sunday title and its former stablemate
3) Labour funding Britain’s defence at ‘half-speed’, says former army general | Sir Richard Barrons turns to the City of London to try to close an ‘enormous gap’ in military investment
4) North Sea gas ‘saves Britain billions a year’ | Analysis comparing British resources with cost of imports will pile pressure on Ed Miliband to reverse drilling ban
5) World not prepared for interest rate shock, warns JP Morgan boss | Jamie Dimon says the war in Iran has the potential to define the future global economic order
What happened overnight
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4pc higher. Japan’s Nikkei was choppy as it erased early gains to trade 0.2pc lower.
US stock futures dipped 0.55pc, while European futures pointed to a higher open after being closed for holidays on Friday and Monday.
“Financial markets are oscillating in a narrow, uneasy range as traders sized up the countdown to Donald Trump’s Iran deadline,” wrote Stephen Innes at SPI Asset Management.
“Tentative ceasefire optics (were) offering brief relief but never fully offsetting the lingering risk of escalation.
“For now, the rhetoric has tightened, the threats sharpened, and yet the market is not capitulating, conditioned by repetition to expect de-escalation just before the edge.
“Traders are no longer reacting to what is said, but to when it is usually walked back.”