Oil rises above $90 as US-Iran strikes escalate; Ryanair predicts lower fares this summer - business live

Key events3m agoEuropean stock markets fall amid rising Middle East tensions11m agoSegro rejects sweetened £13.5bn takeover bid33m agoDiesel supply squeeze could hit Europe, Morgan Stanley warns48m agoIntroduction: Oil rises above $90 as Middle East conflict escalatesEuropean stock markets fall amid rising Middle East tensionsIt is a shaky start for European stock markets this morning: the Euro Stoxx 600, which tracks the biggest companies on the continent, is down 0.2%.The UK’s blue chip FTSE 100 index is down 0.6%, led by losses in the real estate sector, which is own 1.2%. Energy companies BP and Shell are however rising on the elevated oil price, with shares up 1.5% and 0.7% respectively.Segro rejects sweetened £13.5bn takeover bid⁠The UK warehouse landlord Segro has rejected the latest takeover bid from its US rival Prologis, which valued the FTSE 100 company at £13.5bn.Segro’s board ⁠unanimously rejected the third ​proposal, which included a partial cash alternative of up to £2.7bn and 0.0890 new Prologies share for each Segro share.The warehouse company has repeatedly rejected Prologis’ takeover attempts, including a £12.6bn all-share proposal in June, saying it was “opportunistically timed” and significantly short of ⁠fair value.The company is best known for building cavernous sheds to support the boom in online shopping, developing and renting buildings to companies such as Amazon and Netflix. Its multi-billion pound portfolio includes warehouses, data centres and industrial property, mostly in the south-east of England.The takeover attempt by Prologis – which called on investors today to back the deal – is the latest in a series of endeavours by overseas buyers targeting FTSE 100 companies. Shares in Segro are down 1.4% this morning.Diesel supply squeeze could hit Europe, Morgan Stanley warnsEurope faces a squeeze on its diesel supply this year, according to analysts at the bank Morgan Stanley, with stockpiles expected to decline over the coming months.Analysts including Martijn Rats wrote in a note yesterday: double quotation markThe picture is genuinely tight. Our supply/demand modeling points toward European diesel inventories falling to multi-year lows toward year-end. …The real bottleneck in the oil system right now is refining, more so than crude…The epicenter of all this is the diesel market, and Europe in particular. It comes as global energy markets grapple with the impact of renewed conflict in the Middle East.Morgan Stanley now expects that European stockpiles will fall steadily from August, reaching a low of about 299m barrels in November. That would be the lowest level for that time of year since at least 2015, according to their analysis, which was first reported by Bloomberg.Jim Reid of Deutsche Bank says the rapid rise in the oil price and fresh waves of strikes underscores “how quickly the situation is deteriorating”. double quotation markThree US service members were killed in separate incidents in Jordan and Iraq, while US strikes hit targets including Qeshm Island and multiple locations in southern Iran. At the same time, Iran broadened its retaliation beyond military sites, targeting critical infrastructure across the Gulf, including power and desalination facilities in Kuwait, as well as launching drone and missile attacks towards US bases and regional allies. And prospects for any diplomatic breakthrough remained dim, with Iran’s Foreign Minister Araghchi suggesting that some nuclear issues may ‘remain unresolvable’. Tensions also escalated further in the strait of Hormuz, with Iran signalling a far more assertive stance over shipping flows and claiming to have intercepted vessels attempting to transit the waterway. Introduction: Oil rises above $90 as Middle East conflict escalatesOil prices have hit their highest level in more than a month as the US carries out its ninth consecutive night of strikes against Iran. Brent crude, the international benchmark for oil, is now up by 2.7% to $90.49 a barrel, shortly after hitting as high as $91.41 – its highest level since June.The jump in oil prices comes as the US carries out another fresh wave of attacks against Iran, after a fragile ceasefire agreement signed a month ago unravels and deepens a struggle for control over the strait of Hormuz.The US announced the death of a third American service member over the weekend, after two people were killed in an Iranian attack on a Jordanian base on Friday, with another missing in action.US president Donald Trump said “we hit them very hard again tonight” as he returned to Washington after the World Cup final, adding “we did that in honour of the, probably three, it’s probably three great patriots.”The British military has also reported that a ship caught fire in the strait of Hormuz near the coastline of Oman, though it is unclear what triggered the blaze. Iran’s Revolutionary Guard (IRGC) later claimed two oil tankers were blown up after attempting to transit through the southern route of the strait, but there was no independent confirmation.It also claimed on Monday that two oil tankers ⁠had exploded ⁠and been immobilised ​after attempting to transit the southern route through the strait ⁠of Hormuz.The IRGC said the strait would remain unsafe ​as long as what it called US “aggression” in the region continued, warning that “this passage will ⁠not be safe for the ​transit ​of petrochemical products, ​nor even a single ​drop ‌of oil ​and ​gas”.Elsehwere this morning, uncertainty around the Middle East war has meant Ryanair has had to cut fares during the peak summer travel season.The budget airline has said this morning that its first quarter average fares were 6% lower than last year.Chief executive Michael O’Leary said in a statement: double quotation markThe Middle East conflict led to consumer hesitancy, concerns about EU jet-fuel shortages, economic uncertainty and later bookings. …Despite a recent, slight, uptick in volumes, and less price stimulation, Q2 pricing is trending modestly down (y-o-y) and the final H1 fare outcome is heavily dependent on the strength of close-in bookings in Aug. and Sept. The company said its first quarter profit after tax fell 34% to €538m (£457m), down from €820m at the same point last year and compared with a forecast of €579m in a company ​poll of analysts.The agenda Today: Andy Burnham becomes prime minister