Economists fear that Donald Trump is pushing the world towards recession with no end to the Middle East conflict in sight.
World shares mostly retreated and oil prices jumped on Monday after Trump warned Tehran that the “clock is ticking” as US-Iran negotiations over a permanent end to the war stall. US futures fell and markets in Japan and South Korea pulled back from their records.
And around 80 countries have already imposed emergency fuel rationing with oil prices threatening to climb above $180 a barrel.
The closure of the Strait of Hormuz has blocked shipping and led to shortages with fears that a further spike in energy prices could take place in the next few weeks, reports the Financial Times.
While JPMorgan estimates oil inventories across developed economies could approach ‘operational stress levels’ by June.
“[If the Iran war] does not end in the coming weeks and we don’t have the reopening of the Hormuz strait, I’m afraid a world recession could be on the table,” said EU transport commissioner Apostolos Tzitzikostas.
