Stocks to dive as markets enter ‘dangerous phase’

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Oil prices spiked to kick off the week in Asian trading with Brent crude – the international benchmark – reaching highs of $112 before paring back to $108.

It comes after President Donald Trump issued a 48-hour ultimatum to the Iranian regime on Saturday night, where he called for the full re-opening of the Strait of Hormuz.

The strait is a vital shipping pathway, which sees around a fifth of the world’s oil supply flowing through, has remained closed since conflict broke out but in the last few days select allies of Tehran have been allowed to pass through.

The President wrote on Truth Social that the US would “hit and obliterate” Iranian power plants if the strait was not fully reopened by 23:44 GMT on Monday.

The ultimatum came just a day after Trump said he was considering “winding down” military operations after three weeks of war.

Iran’s Revolutionary Guards responded to Trump’s ultimatum stating the Strait would “be completely closed and will not be opened until our destroyed power plants are rebuilt” should Trump strike.

Neil Wilson, investor strategist at Saxo Markets, said: “The war is entering a new phase of escalation and markets are finally starting to wake up to the gravity of the potential for long-term impact on energy markets…

“Developments over the weekend mean we are entering a new and very dangerous phase for financial markets.”

Sir Keir Starmer is set to chair an emergency meeting today with Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey on the economic fallout of the war in Iran.

We’ll be bringing you the latest analysis and updates.

Here’s a few of our top headlines from the weekend: