Oil, gas and UK government borrowing costs prices jump as Middle East tensions ratchet higher – as it happened

Crude oil prices have hit their highest levels in four weeks, as Washington and Tehran traded attacks and the US reimposed a naval blockade of Iran.

Brent crude has jumped $3.79 a barrel to $87.08 a barrel, a 4.55% increase, the highest since 12 June, before the ceasefire. The US and Iran signed a memorandum of understanding to end the conflict on 17 June and engaged in negotiations for a permanent peace deal.

Iran said on Monday it was continuing talks with mediators from Qatar, Pakistan and Oman to try to prevent any further escalation. Donald Trump declared the ceasefire over last week but left the door to talks open.

US West Texas Intermediate crude rose to a high of $81.25 a barrel, and is now trading at $80.92 a barrel, up 2.8%.

What we think is that the peak of the escalation is behind us, but there are upside risks to oil prices if these disruptions continue and that will keep prices in the $85-$90 range.