European equities started Thursday’s session in negative territory as oil prices surged, briefly topping $100 per barrel again amid continued disruptions to shipping linked to the war involving Iran.
By 08:04 GMT, the pan-European STOXX Europe 600 Index was down 0.4%. Germany’s DAX Index had slipped 0.2%, France’s CAC 40 Index fell 0.5%, and the U.K.’s FTSE 100 Index declined 0.5%.
Crude oil futures jumped sharply, extending recent volatility in energy markets despite efforts by the International Energy Agency to release what would be its largest-ever drawdown of strategic oil reserves to stabilize prices.
The United States has also indicated it plans to release oil from its own strategic reserves. However, analysts warn these steps may only provide short-term relief, noting that a meaningful easing in market tensions will likely depend on the reopening of tanker routes through the Strait of Hormuz, a key global shipping corridor.
Roughly one-fifth of the world’s oil supply moves through the narrow waterway south of Iran, but maritime traffic has nearly halted as Tehran threatens to target vessels attempting to cross the strait.
Reports suggest Iran may have deployed naval mines in the area, while the United States Navy has not yet committed to escorting commercial ships because of safety concerns.
The near halt in tanker traffic through the strait has disrupted oil flows, pushed crude prices higher and intensified concerns about rising inflation worldwide. Europe and Asia are especially vulnerable, as both regions rely heavily on oil and gas shipments that typically pass through the strategic waterway, leaving them exposed to the conflict involving the U.S., Israel and Iran that began more than a week ago.
At 04:05 ET, Brent Crude Oil futures, the global benchmark, were up 4.3% at $95.92 per barrel, while West Texas Intermediate crude rose 3.8% to $90.54 per barrel.
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