Price of oil hits $116 a barrel after Trump says he wants to ‘take the oil in Iran’

The price of oil has risen sharply to $116 a barrel after Donald Trump said he wanted to “take the oil in Iran”, sending Asian stock markets tumbling.Brent crude, the international benchmark for oil, rose by 2% in early trading on Monday, after Trump said that he could seize the Iranian export hub of Kharg Island.Trump told the Financial Times in an interview on Sunday: “To be honest with you, my favourite thing is to take the oil in Iran, but some stupid people back in the US say: ‘why are you doing that?’ But they’re stupid people.”“Maybe we take Kharg Island, maybe we don’t. We have a lot of options,” he said.In Asia, where economies are highly exposed to the shortage in oil and gas coming out of the Gulf, stock markets dropped sharply. Japan’s Nikkei dropped by 3%, while the South Korean Kospi fell 3.4%. Hong Kong’s Hang Seng index shed about 1%.Investors are growing increasingly nervous as the conflict in the Middle East has escalated in recent days as a further 3,500 US troops have arrived in the Middle East..Houthi rebels in Yemen have now also entered the conflict, firing ballistic missiles at Israeli sites, in a dangerous spread of the war that could also worsen the global energy crisis.“There’s still no sign of a clear end to the conflict, and given the various headlines, investors remain fearful about a fresh escalation,” analysts at Deutsche Bank said.The war in the Middle East has ramped up oil prices to historic levels, with Brent crude now on track for its biggest monthly gain ever – up more than 50% since the start of March – beating the previous record of 46% in September 1990 after Saddam Hussein invaded Kuwait.Keir Starmer is expected to hold talks on Monday afternoon with bosses from Shell, BP and the Norwegian energy company Equinor, as well as executives from the finance, insurance and shipping industries, about the crisis in the Middle East. The UK prime minister is expected to discuss what emergency measures might be needed to contain the crisis from the blockade in the strait of Hormuz.Brent traded as high as $119.50 a barrel during March, its highest level since June 2022, after Iran all but closed the strait, through which a fifth of global oil and gas would normally pass.Ipek Ozkardeskaya, a senior analyst at Swissquote, said: “There are bets that crude could rise to $150 and even to the $200 per barrel level if the war doesn’t end quickly. I believe that demand would be heavily hit if prices go that high. Above $120-130 per barrel, global recession odds would take the upper hand and tame upside pressure.”Aluminium prices jumped more than 5% in Asia after Iran struck aluminium producers in Bahrain and the UAE over the weekend, she added.Meanwhile, the chancellor, Rachel Reeves, is expected to warn G7 nations that they must move faster on clean energy to insulate economies against global price shocks from oil and gas, as she and the energy secretary, Ed Miliband, virtually meet G7 finance and energy ministers on Monday.It comes as industry figures have warned that there could be “temporary shortages” at petrol pumps in the UK, as supplies are squeezed by the conflict in the Middle East, which has already driven up average petrol prices to above 150p a litre.