Wednesday 27 May 2026 6:30 am | Updated: Wednesday 27 May 2026 3:58 pm

As it happened: US-Iran peace hopes sends oil lower; Brits handed energy price cap blow

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Good morning and welcome back to the City AM liveblog.

Global markets were able to take the new developments in the Middle East in their stride on Tuesday amid hopes a peace deal was on the horizon.

The FTSE 100 ended the day in the green and despite some choppy trading oil prices eased.

This came despite the US striking Iran in what it framed as “self-defence” in an attempt to hit “Iranian boats attempting to emplace mines”.

But that action may be set to cause further jitters today after Iran has fired back with a threat to the “terrorist” US army. It accused the US of a “blatant violation of the ceasefire” and promised to leave “no act of aggression unanswered”.

The nation’s supreme leader warned “America will no longer have a safe haven in the Middle East,” which echoes a previous sentiment from the regime in Tehran where it threatened war beyond the region,

The strikes from the US did come after President Donald Trump hinted that a ceasefire was near.

“[The] final aspects and details of the deal are currently being discussed, and will be announced shortly,” he posted on Saturday.

But no announcement is yet to follow, despite Trump’s claims the Strait of Hormuz – the all-important waterway for global oil supplies – was set to be re-opened.

Some of the thornier issues in negotiations are understood to include Iran’s nuclear programme and its hesitation to guarantee unrestricted passage through Hormuz.

We’ll be bringing you all the latest on this and more.