European equities moved slightly lower on Wednesday as investors monitored developments in the conflict involving Iran and reacted to reports about a potential release of additional oil supplies.
By 08:00 GMT, the pan-European Stoxx 600 index had declined 0.5%. Germany’s DAX dropped 1.0%, France’s CAC 40 fell 0.9%, and the U.K.’s FTSE 100 was down 0.6%.
Markets in Europe followed a relatively steady lead from Asian trading, where investors responded to a Wall Street Journal report stating that the International Energy Agency was considering the largest release of strategic oil reserves in its history in an effort to curb rising crude prices.
The news provided some relief after significant volatility in energy markets earlier in the week. The global Brent benchmark is now trading close to $90 per barrel after briefly approaching $120.
At 04:04 ET, Brent crude futures were up 2.2% at $89.75 per barrel, while U.S. West Texas Intermediate futures rose 2.2% to $85.33 per barrel.
Meanwhile, tensions in Iran remained elevated. The United States and Israel exchanged air strikes with Iran across the Middle East on Wednesday, while authorities in Tehran signaled readiness to suppress any internal unrest.
Financial markets have largely been betting that U.S. President Donald Trump will seek a swift end to the confrontation. However, Trump has warned that Washington could launch strikes against Iran if the country attempts to disrupt oil shipments through the Strait of Hormuz, a vital maritime route through which roughly one-fifth of global crude supply is transported.
Outside geopolitical developments, investors in Europe also examined fresh inflation figures from Germany, which showed harmonized consumer prices rising month-on-month in February as expected.
Later in the day, U.S. inflation data will be closely watched by markets. Economists expect headline consumer prices to increase 2.4% year-on-year through February and 0.3% compared with the previous month.
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