The collapse of talks over the weekend and Donald Trump’s threat to blockade ships coming from and heading to Iranian ports has had the expected impact on markets.
Oil prices have surged back above $100 a barrel, Asian stock markets have fallen and European market futures point to a lower opening.
But the wider canvas here is what seems an attempt to bring more pressure to bear on China.
Although China has large oil reserves and gets a lot of oil from Russia, Iran provided 16% of China’s crude oil imports. Most of the Iranian oil that was making it through the strait was bound for China. Stopping that may force China to bring more pressure on Iran to reach a deal.
The other commodity that takes a battering from the extended blockage is confidence and this morning’s chief financial officers confidence survey by Deloitte – which included most of March – has shown any signs of returning business confidence earlier this year extinguished