Oil prices plunge after Trump warns Iran over Strait of Hormuz

Oil prices fell sharply on Tuesday after US President Donald Trump warned Iran to not block a shipping route crucial to global energy supplies.

"If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far," he said on Social media.

In morning trade in Asia, Brent crude was 10% lower at $88.92 (£66.19) and Nymex Light Sweet was down 10.2% at $85.08.

Oil had reached almost $120 a barrel on Monday over fears that the US-Israeli war with Iran would cause lengthy disruption to supplies from the Middle East, but fell back after Trump suggested that the war could end soon.

"We took a little excursion because we felt we had to do that to get rid of some evil. Then, I think you'll see it's going to be a short-term excursion," Trump said during a news conference in Florida.

Share prices in Asia made gains as concerns about the economic impact of he conflict eased.

Japan's Nikkei 225 was 3.3% higher, while the Hang Seng in Hong Kong was up by 1.7% and South Korea's Kospi gained 6.2%.

Stock markets in the region were hit hard the previous day on investor concerns that disruptions in the Gulf could mean higher inflation and rising interest rates.

The Strait of Hormuz is crucial to the global energy market as around a fifth of the world's oil passes through the narrow waterway.

While the price of oil has fallen from Monday's peak it is still more than 20% higher than where they were before the US and Israel launched airstrikes on Iran just over a week ago.

G7 nations on Monday said it is ready to take "necessary measures" to address the global supply of energy in the light of surging oil prices.

The meeting ended without a final decision on whether the nations would release oil from stockpiles, though the matter was discussed.

UK Chancellor Rachel Reeves said on Monday the UK used the meeting to urge for "immediate de-escalation" in the Middle East and guaranteed security for vessels in the region.

She said: "I stand ready to support a co-ordinated release of collective IEA oil reserves."