LONDON: Oil surged and stocks fell on Thursday after Donald Trump threatened further heavy strikes on Iran, and offered no solution to reopening the key Strait of Hormuz.
Investors were left unimpressed with the US president's address to the nation, in which he again urged countries dependent on the waterway for energy supplies to reopen it themselves.
While Trump signalled that the US was 'very close' to achieving its military objectives, he vowed 'extremely hard' strikes against Iran in the next two to three weeks.
Tehran responded by warning the US and Israel to expect "more crushing, broader, and more destructive actions".
The address late Wednesday in the US dampened hopes of de-escalation that had earlier buoyed markets.
International benchmark, Brent North Sea crude, which had fallen below $100 a barrel ahead of Trump's speech, went on to rally around eight percent to above $109 per barrel.
Frankfurt's stock market shed more than two percent and Paris dropped one percent in midday deals Thursday.
London dipped just 0.2 percent, helped by gains of around three percent for the share prices of energy heavyweights BP and Shell.
"Market sentiment has deteriorated overnight after Trump's much anticipated address delivered little to nothing new on potential timelines or conditions for ending hostilities against Iran," said Deutsche Bank managing director Jim Reid.
"There was no signal of the US seeking an imminent offramp out of the war."
The dollar, seen as a safe haven investment, rose strongly against major rivals.
Asian equities struggled, with Tokyo closing down more than two percent and Hong Kong and Shanghai also lower.
Markets have endured huge volatility since the US-Israeli war on Iran was launched on February 28, with Trump frequently U-turning after making policy statements. - AFP
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