European oil and gas shares moved higher on Monday after fresh military exchanges between the United States and Iran intensified concerns over global energy supplies, pushing crude prices sharply higher.
The renewed escalation has also renewed uncertainty over the interim agreement reached between Washington and Tehran last month, which had been intended to reopen the Strait of Hormuz and support further diplomatic negotiations.
Crude Prices Jump on Supply Concerns
Brent crude futures climbed 2.9% to $78.24 a barrel by 04:25 ET (08:25 GMT), while U.S. West Texas Intermediate (WTI) gained 2.7% to $73.34 a barrel.
The rally followed reports that Iran had once again declared the Strait of Hormuz closed, raising fears of further disruption to one of the world’s most important energy shipping routes.
European Oil Producers Advance
Higher crude prices boosted energy stocks across Europe, with the STOXX Europe 600 Oil & Gas index rising 1.2%, making it one of the strongest-performing sectors on the broader STOXX 600.
Among individual companies, OMV (TG:OMV) and Repsol (TG:REP) gained around 1% and 2%, respectively.
TotalEnergies (EU:TTE), Maurel & Prom (EU:MAU), Eni (BIT:ENI) and Equinor (TG:DNQ) all advanced between 1% and 2.1%, while Shell (LSE:SHEL) rose 1.1% and BP (LSE:BP.) added 2.3%.
Strait of Hormuz Traffic Declines
The market reaction followed another weekend of military escalation between the United States and Iran.
Iran launched strikes against U.S. facilities across the Gulf on Sunday, while the country’s Revolutionary Guards said on Monday that American military bases in Kuwait and Bahrain had also been targeted.
The conflict has affected shipping activity through the Strait of Hormuz, a strategic passage that normally handles around one-fifth of global daily oil and liquefied natural gas supplies.
According to ship-tracking company Kpler, vessel movements through the strait fell to their lowest level in five weeks on Sunday, with only six ships completing the transit.
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