BP PLC (LSE:BP.) and other oil producers led gains in London on Wednesday morning after crude prices climbed to a two-week high following fresh US military strikes on targets in Iran that renewed concerns over energy supplies through the Strait of Hormuz.
Brent crude jumped 5% to $78 a barrel, its highest level in a fortnight, after US President Donald Trump said he thought the ceasefire with Iran was "over".
BP shares were lifted 3.9% to top the FTSE 100 leaderboard, with Shell PLC (LSE:SHEL, NYSE:SHEL) rose 1.7%.
Among mid-cap and small cap names, Serica Energy PLC (AIM:SQZ), Gulf Keystone Petroleum Limited (LSE:GKP), Diversified Energy Company PLC (LSE:DEC), Enquest PLC (AIM:ENQ) all were carried over 3% higher, followed by the likes of Borders & Southern Petroleum (AIM:BOR), United Oil & Gas PLC (AIM:UOG), Harbour Energy PLC (LSE:HBR), Star Energy PLC (AIM:STAR), Ithaca Energy PLC (LSE:ITH) and others. Oil services companies like Hunting PLC (LSE:HTG) also climbed.
"To me, I think it's over," Trump told reporters at a Nato summit in Ankara, Turkiye.
"I don't want to deal with them anymore. They're scum... They're led by sick people... I'll speak to our negotiators. They want to negotiate - they're good people... but they have to come back to me. As far as I'm concerned, it's just a waste of time dealing with them."
He was asked about the ceasefire after US Central Command said military forces struck more than 80 targets in Iran overnight, including command-and-control networks, coastal radar installations, anti-ship missile capabilities and vessels operated by the Islamic Revolutionary Guard Corps. Washington also revoked a waiver that had allowed Iran to restart oil exports.
Iran condemned the measures as a breach of the ceasefire agreed last month and pledged a "decisive" response, raising concerns that the conflict could again disrupt energy supplies from the Middle East.
Jim Reid, strategist at Deutsche Bank, said the developments had "reignited concerns about energy supplies and geopolitical risk". He noted that attacks on commercial shipping in the Strait of Hormuz had reached their highest level since the US-Iran interim agreement came into effect on 17 June.
Neil Wilson, strategist at Saxo, said: "With oil longs cleared out there is scope for another rally here," although he added it remained in both sides' interests to avoid a wider escalation.
** UPDATE: Adds Trump comments, updates prices **
