Donald Trump said the US military could begin escorting oil and gas tankers through the Gulf "if necessary" as Washington seeks to stabilize energy prices after the US-Israel war on Iran. The US president also ordered the US Development Finance Corporation to backstop insurance costs for ships travelling through the at-risk waters. Iraq has already shut down its largest oilfields due to the lack of tankers willing to risk the journey.

Crude prices surged almost 10% and natural gas prices spiked in Asia and Europe following the attack on Iran, which triggered conflict across the world's most important oil-exporting region. Oil briefly hit a 19-month high above $85 a barrel before easing after Trump's announcement. Stocks and bonds recouped most losses yesterday even as fears of a prolonged energy price shock rattled global markets.

US stock markets ended slightly lower, with the S&P 500 and Nasdaq both down roughly 1%, having fallen earlier to their lowest levels in months. "The market seems to be mentally transitioning from a short war to a long war," said Peter Schaffrik, global macro strategist at RBC Capital Markets. The reaction to the supply shock has been muted compared to past disruptions, with crude failing to hit the symbolically important $100 a barrel level.