Iran war “re-escalation risks,” new Trump threat drive up oil prices as diplomacy staggers on

World shares mostly retreated and oil prices jumped Monday after President Trump warned Tehran the “clock is ticking” for a peace deal.

U.S. futures fell and markets in Japan and South Korea pulled back from their records. In early European trading, Britain’s FTSE 100 edged up 0.1% to 10,205.31. France’s CAC 40 lost 0.9% to 7,883.42, and Germany’s DAX dropped 0.1% to 23,925.82.

During Asian trading, Tokyo’s Nikkei 225 fell 1% to 60,815.95, a decline led by technology-related stocks. It reached all-time intraday high levels last week above 63,000.

Seoul’s Kospi climbed 0.3% to 7,516.04 after trading lower earlier in the day. It crossed the 8,000 mark for the first time on Friday, supported by buying of technology shares driven by the boom in artificial intelligence, but later declined partly on profit-taking by investors.

Hong Kong’s Hang Seng lost 1.1% to 25,675.18. The Shanghai Composite index edged 0.1% lower to 4,131.53, after China reported weaker-than-expected economic data for April. 

Oil prices rose after Mr. Trump issued his latest warning to Iran in a social media post, saying the regime “better get moving, FAST, or there won’t be anything left of them,” following a call with Israeli Prime Minister Benjamin Netanyahu.

Brent crude, the international standard, gained 0.7% to $110.05 per barrel early Monday. It was trading at roughly $70 a barrel in late February before the start of the war. Benchmark U.S. crude was trading 1% higher to $106.49 per barrel.

A drone strike over the weekend on a United Arab Emirates’ nuclear power plant added to worries over a potential escalation in the conflict.

ING commodities strategists Warren Patterson and Ewa Manthey wrote in a Monday research note that hopes as Mr. Trump visited Beijing last week that China might use its influence over Tehran to “break the deadlock between the U.S. and Iran,” were “possibly misplaced.”

“If anything, re-escalation risks are increasing,” they wrote.

CBS/AP