Oil prices jump after Iranian missile attacks on Israel in Middle East crisis – business live

Israel could target Iranian oil refineries in retaliation for Tuesday night’s attack, in which Tehran launched an estimated 180 ballistic missiles at Tel Aviv and other targets across the country in a dramatic escalation of the conflict between the two countries, write the Guardian’s Peter Beaumont and Andrew Roth.

The US website Axios has reported that Israeli officials are considering a “significant retaliation” to the Iranian attack within days that could target oil production facilities inside Iran and other strategic sites.

US lawmakers have backed a strike against Iranian oil production. Sen Lindsey Graham, of South Carolina, said he would “urge the Biden administration to coordinate an overwhelming response with Israel, starting with Iran’s ability to refine oil”. In a statement, he said Iran’s oil refineries should be “hit and hit hard”.

You can read the full story here:

Axios reported:

Many Israeli officials point to Iran’s oil facilities as a likely target, but some say targeted assassinations and taking out Iran’s air defense systems are also possibilities.

Iran’s oil is sanctioned by the USA, so it does not directly reach the US or its allies (indirectly is another matter). However, there are plenty of other non-allied countries who are willing to buy it, so any disruption to Iranian oil supplies would probably impact the global market and raise prices.

Oil prices may be up today, but Saudi Arabia is warning that prices could fall as low as $50 per barrel, the Wall Street Journal reports.

The reported comments came ahead of an online meeting on Wednesday of the Organization of the Petroleum Exporting Countries and allies, an oil cartel described as Opec+ that controls a large proportion of global supplies.

Before the escalation of the Middle Eastern crisis, oil prices had been on a downward path for weeks – and prices are well below the $90 per barrel level a year ago despite the conflict.

The Saudi energy minister warned other Opec+ members that they should comply with production cuts to avoid further price drops. The Wall Street Journal reported:

During a conference call last week, Prince Abdulaziz bin Salman, the oil minister of OPEC kingmaker Saudi Arabia, warned fellow producers prices could drop to $50 a barrel if they don’t comply with agreed production cuts, according to OPEC delegates who attended the call.

Falling oil prices would help consumers after several years of inflation – and it could help Kamala Harris in her effort to defeat Donald Trump in the US presidential election. However, oil producers – with Saudi Arabia as the biggest – want to sustain prices.

One share price that has surged on Wednesday is that of musicMagpie. The second-hand smartphone seller is up 48% after retailer AO World agreed a takeover.

But it is hardly a happy ending for musicMagpie, which started out as a reseller of CDs and DVDs. It listed shares in 2021 with a heady £200m+ valuation (netting chief executive and co-founder Steve Oliver £12m in the process). But the 9.07p-per-share takeover values the company at only £10m three years later.

As any buyer of second-hand electronics knows, you have to be careful what you pay for. Investors in musicMagpie bought in during the coronavirus pandemic boom in tech sales. Shortages of computer chips meant that electronic devices were hard to come by, which helped resellers.

However, that boom had petered out by early 2022, and musicMagpie’s share price slumped as it turned lossmaking.

It has had some interest since, notably with BT Group last year considered a bid to complement its EE mobile network business, which also sells electronics. But its share price was at 5.75p on Tuesday before the takeover was announced – 97% down from the heights above £2 in April 2021.

The directors of musicMagpie unanimously backed the takeover.

John Roberts, AO’s chief executive, said:

To achieve our strategic ambition of becoming the destination for electricals, it is crucial for AO to enhance its consumer tech offering. A top-tier trade-in service will be essential, and musicMagpie represents a significant enabler in unlocking value through our reverse supply chain.

JD Sports struggles with Red Sea disruption and wet weather

Sarah Butler

The biggest share price drop on the FTSE 100 this morning is trainer and clothing retailer JD Sports. It is down by 3.6% on Wednesday morning.

UK business has been hit by falling sales after disruption in the Red Sea stalled deliveries and the cold wet spring reduced demand for camping kit and clothing.

The retail group, which owns Millets and Blacks in the UK, said sales at the outdoor kit chain were down 5.3% in the six months to 3 August as “key product lines” had been delayed by Houthi attacks off Yemen delaying or rerouting shipping and the early date of Easter fell outside the camping season for the first time since 2018.

It said poor weather compounded the issue, reducing demand for seasonal outdoor living product such as tents and camping equipment.

The chilly wet weather also hit the group’s main JD sportswear chain in the UK where sales at established stores were down 4.6% in what the group described as a “challenging and often volatile UK market”.

JD said discounting in the market had surged after “unfavourable spring and early summer weather conditions, dampened footfall and full price demand for seasonal [clothing]”.

Good morning, and welcome to our live coverage of business, economics and financial markets.

Oil prices rose on Wednesday morning as investors around the world weighed the risk of threats to energy supplies after Iran’s missile attack on Israel threatened to escalate the Middle East conflict.

The price of Brent crude oil futures, the North Sea benchmark, rose by 1.6% to $74.75, while the price of futures for its North American counterpart, West Texas Intermediate, rose by 1.7% to $70.98.

Prices surged on Tuesday as reports of Iran’s imminent attack emerged. The attack was a response to Israel’s killing last week of Sayyed Hassan Nasrallah, the leader of Lebanon’s powerful militant group, Hezbollah. Hezbollah is widely seen as an Iranian proxy, and Israeli troops have moved into Lebanon.

Brent crude prices rose by 3.8%, after the largest intra-day move since April 2023, according to analysts led by Jim Reid at Deutsche Bank. They wrote:

There were some indications that escalation risks might be higher this time around. The Pentagon said that this attack used around twice as many ballistic missiles as the one in April, while Iranian commentary was more ambiguous on whether the attack would be one-off.

Most Asian stock markets outside China slumped on Wednesday morning, following the lead of US indices the night before. Japan’s Nikkei slumped by 2.2%, South Korea’s Kospi fell by 0.6%, and Australia’s ASX 200 index fell by 0.1%.

However, Hong Kong’s stock market soared by 6% amid Beijing’s stimulus, which has pushed up Chinese stocks. The mainland Chinese stock markets were closed for the Golden Week holiday.

Investors are now considering whether Israel will respond directly to Iran, while Israeli forces continued to strike Beirut, Lebanon’s capital. Israel has also been fighting in Gaza, to its west, for almost a year after the attacks by Hamas on 7 October.

Mohit Kumar, chief economist for Europe at Jefferies, an investment bank, said:

Risk off dominated the markets on escalation in the Middle East. Oil moved higher on geopolitical risks. Markets did stabilise after the initial risk off and investors now wait for the response from Israel.

The agenda

• 10am BST: Eurozone unemployment rate (August; previous: 6.4%; consensus: 6.4%)

• 1:15pm BST: US ADP employment change (September; prev.: 99,000; cons.: 120,000)