Oil prices surged above $108 a barrel at one point this morning after Gulf states postponed a key meeting with Iran aimed at easing tensions over the Strait of Hormuz.
Brent crude jumped 3.5% as markets opened in Asia before easing slightly to $107.80, after foreign ministers delayed talks scheduled to take place in Oman on Monday.
The meeting was expected to discuss a temporary deal between Tehran and Muscat to manage shipping through the strait, which carried around a fifth of the world’s oil and gas before the US-Israel war with Iran began in February.
The setback comes amid mounting pressure on Gulf energy infrastructure.
Saudi Arabia was forced to close a strategically important east-west oil pipeline following a drone attack from Iraq, while Iranian-backed Houthi rebels have launched missiles and drones at Saudi energy infrastructure.