Oil value soars to six-month excessive after Trump risk to assault Iran

The price of oil hit a six-month high on rising concerns of a US military attack on Iran.

With tensions between Washington and Tehran mounting, Brent crude jumped 5 per cent to $71.89 a barrel.

That was the highest since the start of August and took gains since early January, when oil dipped below $60 a barrel, to 20 per cent.

Shares in BP and Shell gained more than 2 per cent.

The latest surge in the oil price came as Iran vowed a ‘crushing response’ to any US attack after Donald Trump warned that time was running out for a nuclear deal.

The rising oil price threatens to push up prices at the petrol pumps for motorists. 

Iran is OPEC’s fourth-largest oil producer with output of 3.2million barrels per day.

Iran is OPEC’s fourth largest oil producer with output of 3.2million barrels per day

Analysts warned military conflict could hit Iranian production and lead to the closure of the Strait of Hormuz – a key supply route with 20million barrels passing through it every day.

‘The immediate concern is the collateral damage done if Iran takes a swing at its neighbours or possibly even more tellingly, it closes the Strait of Hormuz to the 20million barrels per day of oil that navigates it,’ said PVM analyst John Evans.

Susannah Streeter, chief investment strategist at Wealth Club, added: ‘With the Middle East tinder box looking set to ignite again, oil prices have moved sharply higher, lifting shares in listed energy giants. 

‘The weaker dollar is also partly behind the move in crude rising higher, given that it’s denominated in the currency and so makes oil more attractive for buyers.’

Derren Nathan, head of equity research at Hargreaves Lansdown, said: ‘If this spills over into military conflict, the concern for energy is not only over 3million barrels of daily oil production but also disruption to tankers carrying oil and Liquid Natural Gas through the Strait of Hormuz.’