And finally, here’s Debbie Carson on today’s oil price spike:

Crude oil prices rose to three-and-a-half-year highs following the news that the Trump administration revoked the nuclear deal with Iran.

Brent crude oil prices, the global benchmark, and US West Texas Intermediate rallied above $77 and $71 per barrel, respectively, in the aftermath of the announcement.

The rise came after the treasury secretary, Steven Mnuchin, told reporters he did not expect a major oil price hikes because other countries would increase output to offset such losses.

Although Donald Trump’s decision to withdraw from the Joint Comprehensive Plan of Action was not a surprise, reinstating all US nuclear-related sanctions was more than expected, said Barclays analysts in a research note.

Bart Melek, global head of commodity strategy at TD Securities, said this announcement comes at a time where there are increased geopolitical tensions in the Middle East and global crude oil inventories are normalizing after being in a supply glut for the past few years. In the US inventory levels are now below the five-year average.

“There’s a broad consensus that [supplies are] going to rebalance and tighten up, but you throw the possibility of disruptions of flows from Iran, and the markets started to worry,” he said.

Goodnight! GW

My colleague Phillip Inman has written a Q&A about the rising oil price.

Here’s a flavour:

What does the nuclear deal have to do with the oil price?

When Iran pledged to limit its nuclear ambitions to civil energy production under the deal with the P5+1 group of world powers – the US, UK, France, China, Russia and Germany – sanctions were lifted on its oil exports, giving a significant boost to global oil supplies.

How big is Iran’s contribution to global supplies?

Iran is the third largest producer in the Organisation of the Petroleum Exporting Countries (Opec), which makes it a heavy hitter in the production of oil. It produces 2.5m barrels a day, equal to about 3% of global demand. Trump’s threat to reimpose sanctions and effectively keep up to half of Iranian oil in the ground has hit the oil price since he was elected in November 2016. The price of Brent crude is now up 50% year on year.

Here’s the full piece:

The rally in oil stocks has driven Britain’s blue-chip stock index up almost 100 points today.

The FTSE 100 closed 96 points higher at 7,662 tonight, a gain of 1.3%, and its highest level in over three months.

David Madden of CMC Markets says:

The FTSE 100 is the best performing major European index today thanks to the rally in oil stocks. The British equity benchmark has a disproportionally large exposure to the energy sector, and the pickup from BP and Royal Dutch Shell has made it the standout market in Europe. The US withdrawal from the Iranian nuclear deal has sent the oil market to new multi-year highs, and the major oil titans are reaping the rewards.

Over in New York shares are also rising, with the Dow up almost 200 points. Not much sign of panic over Donald Trump’s announcement.....

City Index point out that French oil giant Total could lose out on a valuable contract in Iran.

The slump in the Iranian rial today is a reminder of the damage that new sanctions will cause to Iran’s economy.

Here’s Associated Press’s take:

Many Iranians are worried about what Trump’s decision could mean for their country.

The Iranian rial is already trading on the black market at 66,000 to the dollar, despite a government-set rate of 42,000 rials. Many say they have not seen any benefits from the nuclear deal.

Iran’s poor economy and unemployment sparked nationwide protests in December and January that saw at least 25 people killed and, reportedly, nearly 5,000 arrested.

Here’s our round-up of the companies who could be hurt by Donald Trump’s decision to rip up the Iranian nuclear deal, from oil firms to car producers and airline manufacturers:

The Iranian clampdown could also affect oil giant BP.

BP recently agreed to sell a North Sea gas field which it co-owns with Iran’s state owned oil company. New sanctions could potentially cause that deal to unravel.

My colleague Rob Davies explains:

Late last year BP agreed to sell three North Sea gas fields to Serica Energy for $400m. One of the fields, Rhum, is co-owned by a subsidiary of Iran’s national oil company. That means a licence is required from the US Office of Foreign Asset Control (OFAC) to allow US nationals or companies to work on it.

If Serica cannot obtain that licence because of new sanctions it faces the risk of being unable to call on US-owned companies, in the event, for instance, of a fire or oil spill, severely restricting its emergency options.

The sale is not yet complete and it is unclear whether it will go ahead now. “We take care to ensure we always comply with applicable sanctions,” BP said.

The BBC’s Simon Jack agrees that the deal could be in doubt.

Britain’s stock market has responded to the threat of geopolitical upheaval, by hitting its highest level in over three months.

The FTSE 100 has gained 35 points to reach 7601, for the first time since the end of January.

Oil companies are leading the rally, with Royal Dutch Shell up 2% and BP gaining 2.2%, as Brent crude bobs just below the $77 mark.

Connor Campbell of City firm SpreadEx explains:

Trump’s Iranian nuclear deal pull-out and subsequent sanctions, via its impact on Brent Crude, remained the core driver of trading on Wednesday.

Though Brent couldn’t quite hold above $77 per barrel, the black stuff is still trading at its best price since 2014. This propelled BP and Shell more than 2% higher apiece, gains that provided the bedrock of the FTSE’s own growth.

Other European indices are calm today, with the pan-Europe Stoxx 600 up 0.2%.

Wall Street is also expected to open higher, as investors take the Iranian nuclear issue in their stride.

Over in parliament, foreign secretary Boris Johnson is updating MPs about Iran.

He says that Britain has no intention of walking away from the nuclear deal (the Joint Comprehensive Plan of Action).

America must now “spell out” their view of the way ahead, Johnson continues.

He also urges Iran to show restraint, adding that a nuclear-armed Iran would never be acceptable to Britain.

Our Politics Live blog has full details:

Iranian citizens and businesses are facing fresh pain today as their currency, the rial, falls to fresh record lows.

Reuters has the details:

The dollar was being offered for as much as 75,000 rials, compared to around 65,000 just before Trump announced his decision on Tuesday night, according to foreign exchange website Bonbast.com, which tracks the free market.

Dealers in Tehran quoted similar levels on Wednesday, according to an Iranian economist outside the country who is in touch with them. One dealer said the rial had hit 78,000, while another said he had made two sales of dollars at 80,000.

Amir Paivar of the BBC Persian TV points out that there is confusion in the market, after several days of heavy losses.

Brent crude is heading towards $80 per barrel, says Ken Odeluga, market analyst at City Index.

Uncertainty over the Iranian situation, combined with speculation in the markets, are capable of “taking prices even higher in the near-term”, he explains.

Trump’s decision to abandon the Iranian nuclear deal will have a major impact on the oil market, says City investor Richard Robinson.

Robinson, who manages the Ashburton Global Energy Fund, says it will probably remove hundreds of thousands of barrels of oil from the market each day.

The worst-case scenario, involving strict adherence and policing of sanctions, could see as much as 700kbbld removed from the market. A less disciplined approach, with ambiguous US guidance, could remove less than 200k barrels per day. Trump’s rhetoric sounded fairly unambiguous.

Although Trump would have ideally liked Europe to join him in re-imposing sanctions, the eventual effect is likely to be similar. Europe currently imports between 500-600kbbld of Iranian crude and it is expected this number will drop by approximately 60%. Iranian barrels can be easily substituted for Iraqi crudes.

European companies are present in both Iran and the US. Companies such as Total and Eni may choose to stop lifting Iranian crudes altogether, for fear of being precluded from the US market. It is expected Asian refiners, with exposure to both regions, may also choose to follow the ban.

China, on the other hand, may choose to take advantage of the widening discounts and purchase more Iranian crude – through various shell companies.

Companies who have been dealing with Iran now risk violating US sanctions, and need to plan accordingly, says Michael Harris, director of financial crime compliance at LexisNexis Risk Solutions.

Any organisation conducting business with Iranian individuals, companies or related entities could actually find themselves subject to sanctions due to the United States’ withdrawal from the Joint Comprehensive Plan of Action, and subsequent re-implementation of secondary sanctions.

With such a significant change in position from the US, it is vital that firms re-evaluate their dealings with censured entities and regularly screen their customers against the latest and most relevant sanctions lists. If not, they risk breaching sanctions, facing unprecedented fines and reputational damage, as well as repercussions for future business with the United States.”

US planemaker Boeing may also be unhappy with Trump’s decision.

Like Airbus, Boeing has signed billions of dollars worth of deals with Iranian airlines in the last couple of years. Last night, treasury secretary Steven Mnuchin warned that Boeing and Airbus’s licences to trade with Iran “will be revoked.”

China, India and Korea could all be hit by Trump’s decision.

As this chart shows, they are the biggest customers for the oil which Iran has been pumping vigorously since sanctions were lifted in 2016.

Donald Trump’s decision has gone down predictably badly in Iran.

MPs symbolically burned a US flag in the country’s parliament this morning and chanted “death to America”

The Iranian parliament’s speaker, Ali Larijani, accused the US president of conducting a “diplomatic show” and claimed that president Trump “does not have the mental capacity” for the job.

Geopolitical anxiety is driving investors into the safety of the US dollar today, sending it to its highest level since December 2017.

That’s bad for emerging market currencies, such as the Turkish lira, which has lurched to a fresh all-time low of 4.3736 liras to the dollar.

That might force Istanbul’s central bank to intervene to prop up the lira

Trump’s “very aggressive rhetoric” against Iran last night has jolted the oil market, says Lukman Otunuga, research analyst at FXTM

While it was widely anticipated that Trump would pull out of the Iran agreement, what is likely to leave a lasting impact on the markets is the threat that he would also penalize those who help Iran.

These overall risks are encouraging traders to price in some new geopolitical risk premium, and his threat can potentially be seen as a blow for U.S allies. There is a threat of Trump’s stark tone questioning U.S relations with its European allies, especially given that the likes of France and the United Kingdom had appealed for Trump not to withdraw.

Some major European companies will be very disappointed by Trump’s decision, having signed some large deals with Tehran since sanctions were lifted under Barack Omaba.

Quartz explains:

Energy giants like Total and Royal Dutch Shell have lucrative agreements to work with Iran, while Renault has a joint venture to make 150,000 cars a year, and Franco-German plane maker Airbus has reportedly delivered just three out of 100 jets promised to Iran, in a deal worth billions....

Any European companies with a US arm that agreed a deal with Iran would now be violating US law, says Adam Smith, a lawyer at Gibson Dunn who is a former Treasury sanctions official.

Those not active in the US could be hit with a “with-us or-against-us sanction,” in which Washington would tell the company that if it wants to keep trading with Iran they can’t trade with America, Smith said.