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FTSE 100 Live: Stocks drop after Iran closes Strait of Hormuz as strikes ramp up

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Donald Trump delivering a speech at a podium during a formal event, emphasizing key points to an attentive audience.
Trump ended the Iran ceasefire last week. (Pic: AP)

Welcome back to the City PM liveblog.

Markets are returning from the weekend to face another geopolitical shock after Iran confirmed it had closed the Strait of Hormuz once more.

The narrow waterway that connects the Persian Gulf with the Gulf of Oman and the Arabian Sea had slowly seen a pick up in traffic flowing through over the last few weeks as peace negotiations continued. Prior to the war, the Strait was responsible for around a fifth of the world’s oil supply.

But following the total abandonment of the cessation of strikes, Iran has confirmed it will close the waterway.

“The Strait of Hormuz will be closed until further notice and until the end of the US interventions in this area and no vessel will be allowed to pass,” a statement issued by the regime in Tehran said.

Brent crude – the international benchmark for oil prices – shot up four per cent to just shy of $80 per barrel on the news,reaching highs not seen since mid-June.

It also followed the US carrying out its fourth strike in a week against Iran on Sunday in retaliation for an Iranian attack on a Cyprus-flagged container ship

Whilst the rise in oil price remains well short of the $120 notched at the height of the conflict, the surge has rekindled inflationary fears for global economies which are still seeing the effects of an energy shock feed through from earlier this year. This week the Office for National Statistics will print fresh GDP data that will give further insight on the economic turmoil triggered by the war in the Middle East.

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

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