European Stocks Slip, Oil Surge Weighs on Sentiment at Start of Week
European stocks fell sharply on Monday, opening the week under heavy pressure as surging crude oil prices fueled concerns about global energy supplies. At 4:05 a.m. ET (8:05 a.m. GMT), Germany's DAX fell 2.1%, France's CAC 40 fell 2.4%, and the UK's FTSE 100 fell 1.6%.
Sentiment worsened after the conflict in the Middle East escalated over the weekend, when the US and Israel launched a new wave of airstrikes on Iran, including hitting targets such as oil depots. This escalation increased energy risk premiums and triggered a repricing of riskier assets, particularly in regions sensitive to energy costs.
On the supply side, several major Middle Eastern producers—Kuwait, Iran, and the United Arab Emirates—reportedly reduced production as tanker traffic through the Strait of Hormuz has been virtually halted since the fighting began a week ago. The Strait of Hormuz is a narrow passageway through which approximately one-fifth of the world's oil supply normally passes, so a prolonged disruption increases the risk of supply constraints.
Oil prices also surged to levels not seen since 2022. Brent futures rose 15% to US$106.55 per barrel, while US WTI rose 12% to US$101.92 per barrel. This energy surge has become a major pressure channel for European markets, increasing inflation risks and worsening growth prospects, especially if the conflict continues and oil price volatility remains high. (alg)
Source: Newsmaker.id
