Source: Sharecast
The FTSE 100 was called to open down around 28 points. At 0722 BST, Brent crude was up 2.3% at $115.19 a barrel and West Texas Intermediate was 1.2% higher $100.83.
Oil prices pushed up after Trump said he wanted to take Iran’s oil. Speaking to the Financial Times, the US President said he could "take the oil in Iran" and could seize the export hub of Kharg Island.
In an interview with the newspaper on Sunday, he said his "preference would be to take the oil", comparing the potential move to Venezuela where the US intends to control the oil industry "indefinitely" following its capture of strongman leader Nicolás Maduro in January.
Trump said: "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."
Such a move would involve seizing Kharg Island through which most of Iran’s oil is exported.
His comments came as Trump beefed up US forces in the region, with the Pentagon ordering the deployment of 10,000 troops trained to seize and hold land. About 3,500 troops arrived in the region on Friday, including roughly 2,200 Marines. Another 2,200 Marines are on their way, while thousands of troops from the 82nd Airborne Division have also been ordered to the region.
"Maybe we take Kharg Island, maybe we don’t. We have a lot of options," Trump told the FT. "It would also mean we had to be there [in Kharg Island] for a while."
Asked about the state of Iranian defence on Kharg Island he said: "I don’t think they have any defence. We could take it very easily."
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Middle East tensions escalated over the weekend as around 3,500 US troops came to the region - increasing the chances of a ground operation that will likely last weeks - and Iran-backed Houthis joined the war.
"That’s a big deal as their inclusion brings new uncertainty regarding trade through the Red Sea, at a time when disruption in the Strait of Hormuz is taking a toll on global energy and other essential goods flows - including fertilisers. Saudi, remember, had redirected its oil exports to the Yanbu port on the Red Sea and was able to export around 5mbpd of oil - a bit less than the roughly 7mbpd export capacity through the Strait of Hormuz. So now, shipping through the Red Sea is also becoming risky."
The escalation also pushed up the price of aluminium, which rose more than 5% in Asia after Iran struck aluminium producers in Bahrain and the UAE over the weekend.
In corporate news, GSK said its Exdensur drug has been approved in China for the treatment of asthma.
The treatment, an ultra-long-acting biologic, was given the green light by the National Medical Products Administration for patients aged 12 years and older with severe asthma. Of the estimated 46m people in China with the condition, around 6% experience severe symptoms that leave them at risk of hospitalisation.
Veterinary group CVS said chief executive Richard Fairman was retiring after six years in the post for personal reasons.
The company, which has operations in the UK and Australia, said Fairman would stay in post until a successor is appointed, to ensure an orderly transition.
Infrastructure investment firm HICL said it has acquired an additional 6.65% stake in Cross London Trains for roughly £52m, taking its total interest in the rolling‑stock project to 13.13%.
HICL said the price paid was expected to add at least 1p to net asset value per share on completion, which was expected to take place before the end of June and would be funded by proceeds from recent disposals.