European airline shares declined sharply on Monday, falling between 2.7% and 7.7%, as a spike in oil prices added pressure to the sector. Brent crude climbed 8% to $102.78 per barrel by 09:00 GMT, weighing on carriers such as Ryanair (NASDAQ:RYAAY), International Airlines Group (LSE:IAG), Lufthansa (TG:LHA), Air France-KLM (EU:AF), easyJet (LSE:EZJ) and Wizz Air (LSE:WIZZ).
During the session, Brent reached an intraday peak of $103.49 per barrel, while U.S. benchmark WTI rose 7.2% to $96.03.
The move in oil markets followed an order from U.S. President Donald Trump directing the Navy to impose a blockade on Iranian ports after ceasefire negotiations with Iran broke down over the weekend in Pakistan.
According to U.S. Central Command, the blockade targeting maritime traffic to and from Iranian ports was scheduled to begin at 10:00 ET on Monday. The measure is more limited than earlier proposals to block all vessels transiting the Strait of Hormuz.
The U.S. delegation in Pakistan was led by Vice President JD Vance, who departed early on Sunday after 21 hours of talks failed to produce an agreement.
Key sticking points included Iran’s nuclear programme, the reopening of the Strait of Hormuz, and Tehran’s backing of proxy groups such as Hezbollah in Lebanon.
Iran signalled it does not intend to resume nuclear discussions with Washington, while Trump indicated he was unconcerned about whether negotiations restart.
Meanwhile, The Wall Street Journal reported that governments in the Middle East are attempting to facilitate further dialogue between the United States and Iran.
Iran has restricted access through the Strait of Hormuz since late February, disrupting roughly 20% of global oil supply and contributing to ongoing volatility in energy markets.
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