Author: Fiona Craig

Oil prices moved modestly lower on Tuesday as traders continued to assess the risk of supply disruptions tied to heightened U.S.–Iran tensions, while broader market fundamentals pointed to sufficient global supply.

Brent crude futures fell 24 cents, or 0.35%, to $68.80 a barrel by 10:02 GMT. U.S. West Texas Intermediate declined 30 cents, or 0.47%, to $64.06.

“The market remains focused on the tensions between Iran and the U.S., but without clear evidence of supply disruptions, prices are likely to drift lower,” said Tamas Varga, an oil analyst at PVM.

“The market is range-bound — an oversupplied market colliding with geopolitics,” he added.

Oil prices had climbed more than 1% on Monday after the U.S. Department of Transportation’s Maritime Administration advised U.S.-flagged commercial vessels to avoid Iranian territorial waters where possible and to refuse boarding requests from Iranian forces.

Roughly 20% of global oil consumption passes through the Strait of Hormuz, the narrow chokepoint between Oman and Iran, making any escalation in the region a material threat to global energy flows.

Iran and fellow OPEC producers Saudi Arabia, the United Arab Emirates, Kuwait and Iraq ship most of their crude exports through the strait, largely to Asian markets.

The advisory was issued despite comments last week from Iran’s top diplomat, who said nuclear talks with the United States, mediated by Oman, had got off to a “good start” and were set to continue.

Goldman Sachs analysts wrote on Tuesday that geopolitical uncertainty continues to underpin prices, noting increased oil volumes on vessels as buyers seek to secure supplies amid elevated risk.

“While the Oman talks struck a cautiously constructive tone, lingering uncertainty around escalation risks, potential sanctions tightening or supply disruptions in the Strait of Hormuz has preserved a modest risk premium,” said Tony Sycamore, an analyst at IG.

Separately, the European Union has proposed widening sanctions on Russia to cover ports in Georgia and Indonesia that handle Russian oil, according to a document seen by Reuters. The proposal would mark the first time the bloc targets ports in third countries.

The move is part of broader efforts to clamp down further on Russian oil exports, a key source of revenue for Moscow as the war in Ukraine continues.

Meanwhile, traders said Indian Oil Corp purchased six million barrels of crude from West Africa and the Middle East, as India scaled back purchases of Russian oil while pursuing a trade agreement with Washington that both sides aim to finalise in March.

Bitcoin (COIN:BTCUSD) fell under the $70,000 threshold during Asian trading on Tuesday, struggling once again to extend its recent rebound from lows near $60,000 as traders turned more defensive ahead of upcoming U.S. employment and inflation reports.

The largest cryptocurrency by market value was down 2.2% at $69,392.7 as of 05:58 GMT.

Bitcoin trapped in a narrow range

In recent days, Bitcoin has largely oscillated between $68,000 and $72,000, following a volatile period last week when prices sank to roughly $60,000—levels not seen since October 2024—before a relief rally pushed the token back above $70,000.

That sell-off was exacerbated by liquidation-driven pressure, with leveraged positions being unwound rapidly during sharp market declines.

Attention has now shifted to U.S. macroeconomic releases that could reset expectations around Federal Reserve policy. Monthly U.S. jobs data, postponed due to a brief government shutdown, is scheduled for release on Wednesday.

Later in the week, Friday’s U.S. Consumer Price Index (CPI) figures will offer fresh insight into inflation trends and could influence market expectations around interest-rate cuts.

Investors are also watching developments at the Federal Reserve closely after President Donald Trump nominated Kevin Warsh as the next Fed chair. Traders are assessing how a potentially more hawkish leadership approach could affect liquidity conditions and risk-sensitive assets, including Bitcoin.

South Korean exchange mishap raises regulatory alarms

Separately, South Korean cryptocurrency exchange Bithumb mistakenly distributed approximately $44 billion worth of bitcoin to users during a promotional campaign, reigniting calls for tighter oversight of digital asset platforms.

The incident occurred on Friday when the exchange accidentally credited accounts with 620,000 bitcoins instead of modest cash rewards. The error triggered a brief bout of selling before it was identified, and 99.7% of the misplaced coins were ultimately recovered.

Lee Chan-jin, governor of the Financial Supervisory Service, said the episode exposed structural vulnerabilities in virtual asset systems and underscored the need for stronger supervisory frameworks and updated legislation to bring cryptocurrencies under firmer regulatory control.

Altcoins also weaken

Most major alternative cryptocurrencies also traded lower.

Ethereum slid 2% to $2,052.92, while XRP fell 1% to $1.43.

Solana declined 1.6%, and both Cardano and Polygon dropped 2.5%. Among meme-themed tokens, Dogecoin lost 1.8%.

Michelin (EU:ML) came under mild pressure early on Tuesday, following disappointing fourth-quarter earnings and a cautious volume outlook from Goodyear Tire and Rubber Co (NASDAQ:GT). The update from the US peer dampened sentiment across the global tyre sector.

By mid-morning European trading, Michelin shares were down around 0.3%. In contrast, Italy’s Pirelli (BIT:PIRC) edged up 0.4%, while Germany’s Continental (TG:CON) gained 0.2%.

In a sector note, analysts at Citigroup said Michelin is the “most exposed” of the European tyre makers to the US market and “have sizeable exposure to the still weak U.S. truck market, albeit more diversified across regions versus Goodyear.”

“Hence any negative read to Michelin we think should not take shares more that 2% lower today,” the Citi analysts added. They also noted that Pirelli has the lowest exposure among the group, partly because it lacks exposure to the US truck segment.

In US premarket trading, Goodyear shares fell more than 8% after the company reported fourth-quarter earnings per share of $0.39, missing Bloomberg consensus expectations of $0.49.

According to analysts at Wolfe Research, Goodyear’s implied outlook for the current quarter reflects expectations that global tyre volumes will decline by 10% year on year due to an “industry inventory build-up and adverse weather.”

They added that while Goodyear did not issue detailed guidance for its 2026 fiscal year or quantify expected volumes, its broader assumptions suggest the group “would need to be able to bring its volumes back to flat year-on-year for 2026 or announce new deep cost savings” for segment operating income to match 2025 levels and for this year’s free cash flow “to be just above breakeven.”

Kering SA (EU:KER) reported fourth-quarter results that came in ahead of analyst forecasts, driving the shares more than 11% higher as the luxury group set out plans to return to growth in 2026 following a difficult year for its core Gucci brand.

The owner of Gucci, Saint Laurent and Bottega Veneta generated fourth-quarter revenue of €3.91bn, representing a 3% decline on a comparable basis. While still negative, this marked an improvement from the 5% like-for-like contraction recorded in the third quarter.

Gucci’s comparable sales were down 10% in the period, unchanged from the prior quarter and ending a run of eight consecutive quarters of worsening trends. The brand delivered €1.62bn in revenue for the quarter. For the full year, Gucci sales reached €5.99bn, a 19% decline on a comparable basis.

Morgan Stanley analysts said the figures were “slightly better than expected,” noting that Gucci’s full-year operating profit came in around 8% above consensus forecasts. The bank also estimated that group earnings before interest and tax were roughly 3% ahead of expectations on a pro-forma basis.

“Kering enters 2026 with a clear objective: to return to growth and improve margins this year,” the company said.

Performance across the rest of the portfolio was mixed but showed signs of stabilisation. Saint Laurent delivered flat comparable growth in the fourth quarter, with revenue of €735m, recovering from declines earlier in the year. Bottega Veneta recorded its strongest quarterly sales on record, with comparable revenue up 3% to €467m, while full-year like-for-like sales rose 3% to €1.71bn.

For 2025 as a whole, Kering reported total revenue of €14.68bn, down 10% on a comparable basis. Recurring operating income fell 33% to €1.63bn, reducing the operating margin to 11.10% from 14.50% a year earlier. Recurring net income from continuing operations declined 56% to €530m, and after restructuring costs the group posted a net loss of €30m, compared with a €1.03bn profit in 2024.

Geographically, trends improved across several key regions. In Western Europe, fourth-quarter comparable sales declined 7%, an improvement from a 14% fall in the previous quarter. North America returned to growth, rising 2% after three quarters of declines, while Asia-Pacific excluding Japan recorded a 6% drop, narrowing from an 11% decline in the third quarter.

Kering ended the year with net debt of €8bn, down from €10.5bn previously. Free cash flow from operations totalled €4.4bn, or €2.3bn excluding real estate transactions.

The board proposed an ordinary dividend of €3 per share, alongside an exceptional €1 dividend linked to the planned sale of Kering Beauté to L’Oréal, which is expected to complete in the first half of 2026.

British Land (LSE:BLND) has agreed a major pre-letting at its Broadgate campus in the City of London, with international law firm Herbert Smith Freehills Kramer committing to a 21-year lease for 238,000 square feet at 1 Appold Street. The agreement represents a significant milestone for the development, securing around 60% of the building’s office space ahead of completion.

The lease includes expansion rights that could increase the firm’s footprint to as much as 360,000 square feet, alongside a dedicated entrance at 8 Exchange Square. Herbert Smith Freehills Kramer is already a major occupier at Broadgate, where it currently uses 270,000 square feet at Exchange House as its headquarters.

The redevelopment of 1 Appold Street will be delivered by Skanska and is scheduled for completion in the first quarter of 2029. The scheme will offer sustainability-led office accommodation with terraces, around 48,000 square feet of leisure space and strong transport connectivity, including direct links to Liverpool Street station and the Elizabeth Line.

Kelly Cleveland, Head of Real Estate and Investment at British Land, said the deal reflects the growing appeal of Broadgate, citing its mix of global occupiers, strong transport connections, high sustainability standards and high-quality public realm. The company added that the transaction underlines continued demand for premium office space in central London, set against a backdrop of limited new supply.

Coca-Cola HBC AG (LSE:CCH) saw its shares rise more than 3% after reporting robust fourth-quarter and full-year 2025 results, underpinned by volume growth, premiumisation and effective pricing. The Europe- and Africa-focused bottler delivered organic revenue growth of 8.1% in the fourth quarter, with volumes up 2.8%, led by sparkling soft drinks and energy beverages.

For the full year, net sales revenue increased 7.9% to €11.60bn, while organic revenue per case rose 5.1%, reflecting disciplined revenue growth management and comparatively moderate inflation. Comparable operating profit (EBIT) grew 11.5% organically to €1.36bn, with comparable EBIT margins expanding by 40 basis points to 11.7% on an organic basis. Comparable net profit climbed 19.4% to €989.3m, and comparable earnings per share increased 19.7% to €2.72.

Free cash flow amounted to €700m, slightly below 2024 levels, largely due to higher capital expenditure of €827.6m, equivalent to 7.1% of revenue. Investment focused on expanding production capacity, automation, digital and AI capabilities, and rolling out more energy-efficient coolers.

Performance varied across regions. In established markets, organic revenue rose 2.3% with broadly flat volumes, as growth in Coke Zero and Sprite offset pressures elsewhere, while energy drinks recorded high double-digit growth. Comparable EBIT in these markets declined 2.8% organically to €378.6m, reflecting increased marketing and operating costs. Developing markets posted organic revenue growth of 6.1%, with volumes up 0.8% and comparable EBIT rising 5.6% to €242.2m. Emerging markets delivered the strongest performance, with organic revenue up 13.2%, volumes increasing 4.4% and comparable EBIT jumping 23.2% to €735.4m, driven by strong execution across Africa and other high-growth regions.

Management highlighted continued progress in premiumisation and customer segmentation, supported by AI-driven revenue management tools. Chief executive Zoran Bogdanovic said the group’s focus on strengthening its “24/7” portfolio had driven market share gains and volume growth in priority categories such as sparkling drinks and energy. He also confirmed that the agreed acquisition of a 75% stake in Coca-Cola Beverages Africa for US$2.6bn, announced in October 2025, remains on track to complete by the end of 2026.

The group also pointed to advances in sustainability, including expanded circular packaging initiatives in Nigeria, Austria and Poland, and community support through The Coca-Cola HBC Foundation, which committed €2.3m to disaster relief during 2025, with a further €5m earmarked for 2026.

Analysts at Jefferies noted that full-year EPS of €2.72 exceeded consensus expectations of €2.65 and said the group appears well positioned for 2026. Guidance calls for organic revenue growth of 6–7% and organic EBIT growth of 7–10%, although foreign exchange movements and financial items could partially offset underlying progress. The analysts also highlighted the strategic value of the Coca-Cola Beverages Africa transaction, citing favourable currency movements since the deal was announced.

Reflecting strong cash generation, the board proposed an ordinary dividend of €1.20 per share, up 17% from 2024. Net debt to comparable EBITDA remained conservative at 0.7x, providing capacity to fund both shareholder returns and ongoing growth investment.