Oil Surges to $110 Amid Middle East Tensions; BP Returns to Profit

Global energy markets are under significant pressure as crude oil prices hit $110 per barrel, driven by stalled peace negotiations in the Middle East and escalating geopolitical friction. This price surge is contributing to a cautious outlook for the FTSE 100, which is expected to open lower. The volatility follows the aftermath of the Iran war, with market analysts noting that the lack of progress in diplomatic efforts is keeping upward pressure on oil. German Chancellor Friedrich Merz recently highlighted the strain on international relations, suggesting that US influence is being challenged by Iranian leadership. BP leveraged the high-price environment to return to profitability in the first quarter, citing strong trading and refining performance. CEO Meg O'Neill stated the company is focusing on simplifying operations and strengthening its balance sheet to drive improved returns and unlock growth across its portfolio. Despite the Q1 recovery, BP anticipates a weaker second quarter. The company expects lower upstream production due to scheduled maintenance and ongoing disruptions in the Middle East, alongside slower refining throughput resulting from turnaround activities. With oil prices remaining above the $100 threshold, analysts warn of continued nervousness among global allies. Furthermore, rising trade tensions with the US are reportedly pushing various countries to forge new strategic partnerships outside of the American sphere.