Donald Trump has said a huge spike in the price of oil as a result of the war he started in the Middle East is “a very small price to pay … for peace”.

The US president’s comments came after the price of a barrel soared over $100 for the first time since Russia’s invasion of Ukraine in 2022, triggering panic on international stock markets amid fears of economic meltdown.

It threatens to increase the price of petrol and other goods around the world, further exacerbating the ongoing cost of living crisis.

Oil supplies in the region have been badly disrupted by America and Israel’s decision to start bombing Iran over a week ago.

Around a fifth of the world’s oil supply is shipped through the Strait of Hormuz between Iran and the United Arab Emirates, but that has virtually stopped since the war began.

Posting on Truth Social, Trump said: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for USA, and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!”

Stock markets in Asia opened sharply down on Monday morning in response to the soaring oil prices.

Japan’s Nikkei 225 index fell by more than 7%, the Hang Seng in Hong Kong lost over 3% and the ASX 200 in Australia was down by more than 4%.

Trading on South Korea’s Kospi index was temporarily halted after it fell by more than 8% in early trading.

The finance ministers of G7 countries – including chancellor Rachel Reeves – will hold a crisis meeting on Monday afternoon to discuss the crisis.

Meanwhile, Iran has defied Trump by choosing Mojtaba Khamenei – the son of the previous Ayatollah Ali Khamenei – as the country’s new supreme leader.

The president has previously said he would be “unacceptable” and demanded to have a say in choosing who the country’s leader should be.