𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

A sell-off across the world’s financial markets gathered pace on Tuesday, while oil and gas prices continued their ascent amid disruption to supplies in the Middle East.

European and US markets fell deep into the red as the escalating conflict reverberated across global markets.

The UK’s FTSE 100 index shed nearly 300 points to close about 2.75% lower on Tuesday.

The sell-off was even deeper for France’s Cac 40 index which plunged by 3.5%, and Germany’s Dax which closed 3.6% lower.

Top US markets were tumbling in the morning’s trading, with the S&P 500 down around 1.7%, and Dow Jones down 1.8% by the time European markets closed.

It comes after US President Donald Trump’s warning that military operations against Iran could take “far longer” than its initial projection of a four-to-five-week timeframe.

Airline stocks continued to take a hammering because of flight disruption caused by the conflict, while banks were also lower on fears over a knock-on impact to the economy.

Oil and gas prices continued to spike as a result of disruption to key shipping routes in the Middle East, and Qatar halting production of liquified natural gas (LNG) on Monday following attacks on its facilities.

Jack Reid, an economist for Oxford Economics, said the region was “critical for global gas prices” with production at its plants representing about a fifth of global LNG supply.

“Qatari LNG accounts for only 11% of European LNG imports,” he said.

“However, disruption to global LNG flows will force European buyers to compete with Asian markets to procure their required gas volumes.”

Mr Reid said the group’s baseline forecast was for a period of “moderate disruption to trade flows for up to a couple of months” with it upgrading its outlook for some natural gas prices by 30%.

“Nonetheless, we do not expect a complete loss of LNG transit from the Gulf, and Europe’s gas market has grown more resilient since the energy crisis,” he added.

The price of Brent crude oil was rising by nearly 8% to about 83.85 dollars per barrel on Tuesday afternoon.

Meanwhile, the pound was caught up in the repercussions with the value of the currency falling 0.6% against the US dollar, to 1.333.

Lindsay James, investment strategist at Quilter, said: “The Iranian conflict has entered its fourth day and is showing no signs of de-escalation, rocking markets in the meantime.

“Any ceasefire for now looks like a remote possibility as Iran appears content with damaging Western interests in the Middle East by targeting other Arab states that house US military bases.

“As a result, investors should be prepared for an extended period where global markets are buffeted and states take extraordinary actions to protect their own interests, such as Qatar shutting off its gas production.

“The worrying element is this conflict has the potential to escalate further, damaging global trade and making the shipment of goods and commodities more difficult.”