Oil prices climbed more than 3% while European stock markets opened lower as investors reacted to the renewed escalation between the United States and Iran, which raised concerns over energy supplies and the impact on the global economy.
Brent crude rose above USD86 a barrel, gaining around 3.4% to USD86.15, after the US carried out a third consecutive night of strikes against Iran and President Donald Trump announced plans to impose a blockade on Iranian shipping. Trump also said a 20% fee would be charged on cargo vessels passing through the Strait of Hormuz, saying the waterway would remain open “with or without Iran.”
The proposed fee would cover what the US described as the costs needed to ensure the security and safety of ships using the strategically important route. The move represented a reversal from recent steps toward a possible agreement between Washington and Tehran.
European markets reacted negatively to the rising tensions. London’s FTSE 100 fell 0.5% to 10,445 points, while Germany’s DAX declined 0.55%, France’s CAC dropped 0.9%, Italy’s main index lost 0.7% and Spain’s IBEX fell 1.07%.
Energy companies were among the few gainers, with BP shares rising about 3% and Shell advancing 1.7%. The gains came after BP released a trading update indicating that its net debt is expected to decline to between USD22 billion and USD23 billion by the end of the second quarter, compared with USD25.3 billion in the first quarter. The company also expects its oil trading performance for the period to be “slightly higher” than in the previous quarter.
