Oil prices jumped and stocks fell after the US launched a fresh wave of attacks against Iran amid an escalating standoff over the strait or Hormuz.
Brent crude, the international benchmark for oil prices, rose 4.7% to $79.59 a barrel on the renewed hostilities in the Middle East.
European stock markets slipped, with the Stoxx Europe 600 index down 0.2%. European airline stocks were among the hardest hit, with Ryanair, Air France and International Consolidated Airlines down between 1.6% and 1.9%. Rivals Wizz Air, Finnair and Lufthansa fell between 2% and 3%.
Asian stock markets were down sharply, with South Korea’s Kospi down 8% and Japan’s Nikkei 225 and China’s Shanghai Composite 2% lower.
Chip companies were also hit, with shares in South Korea’s SK Hynix slumping by 15%. Its rival Samsung Electronics sank 10%.
In the UK, the blue-chip FTSE 100 index was broadly flat, thanks to rises in the oil companies BP and Shell, which were up 2.5% and 1.5% respectively.
The market swings came after the US launched more strikes against Iran on Sunday evening, prompting retaliation from Tehran.
US Central Command (Centcom) said on X that the strikes were “to continue degrading their ability to attack civilian mariners and commercial ships freely transiting the strait of Hormuz”. It added that Donald Trump “has directed the strikes to hold Iranian forces accountable”.
It marked the latest cycle of attacks in the Middle East as Iran seeks to assert control over the strait of Hormuz, a vital shipping channel through which a fifth of the world’s oil supply normally passes.
The escalations have cast further doubt on the fragile interim US-Iranian truce signed last month. Analysts at the bank Goldman Sachs wrote in a note: “Recent attacks highlight how uncertain Gulf exports remain and that a serious re-escalation could re-intensify the short-run upside risk to oil prices.”
The number of vessels passing through the strait is already falling, according to the data analyst Kpler. It found that just six vessels crossed the strait on Sunday, the fewest in five weeks.
Tankers that exited the strait included the very large crude carrier Humanity, which carried 2m barrels of Iranian oil, and another tanker, Capetan Andreas, carrying about 500,000 barrels of Kuwaiti oil products, Kpler found. Three empty tankers entered the Gulf to load oil, it said. Most tankers switch off their transponders when crossing the strait.
Trump said on Sunday that the shipping route was open to commercial traffic, although Iran said earlier that it had closed the strait after a vessel travelled on an unapproved route.
Iran’s Islamic Revolutionary Guard Corps said on Monday that its navy stopped two ships in the strait on Sunday by shutting down their systems, although it did not name the vessels involved.
Gold fell on Monday by 1.5% to $4,060.36 an ounce, as higher oil prices stoked fears that central banks could have to increase interest rates to combat inflation. Gold becomes relatively less attractive when interest rates are higher as the metal does not pay a yield.
