LONDON, England: Stock markets in Europe have steadied after two days of falls but oil prices continued to climb higher as the US-Israel war with Iran threatens to spark an energy supply crunch and experts warned over ongoing volatility, PA Media/dpa reported.
London’s FTSE 100 Index was largely unchanged in early trading today, down just 0.4 points at 10483.8, having slumped nearly 3 per cent on Tuesday amid fears over a prolonged conflict.
Markets were also pulling out of their nosedive across Europe, with the Cac 40 in France 0.3 per cent higher and the DAX in Germany unchanged, despite heavy overnight declines in Asia.
The cost of crude extended gains further, however, with Brent crude up another 3 per cent at USD84.5 (RM330.30) a barrel at one stage – its highest level since July 2024.
Oil and gas prices have been sent soaring amid disruption to supplies in the Middle East, with Iran threatening to block key shipping route, the Strait of Hormuz, and Qatar halting production of liquefied natural gas on Monday following attacks on its facilities.
About a fifth of the world’s oil and gas flows through the Strait of Hormuz, which is a narrow waterway between Iran and the United Arab Emirates.
US President Donald Trump said on Tuesday that the US Navy would protect ships in the region “if necessary” to protect oil supplies.
Neil Wilson, Saxo UK investor strategist, said European markets were “licking their wounds after yesterday’s bruising session”, but he cautioned over more volatility.
He said: “The war goes on and despite significant losses already for European and Asian equity markets, it seems too soon to be confident the worst is behind us, it’s hard to see a real recovery take hold until the shooting stops.
“Signs of a tentative stabilisation in Europe this morning are welcome but could be premature.
“We’ve seen wide-scale de-risking but there may be more to come in terms of a structural decline in equity valuations should the economic effects start to be felt through trade, energy and inflation channels.”
He added that further oil price rises showed “markets are not buying President Trump’s promise to protect and insure shipping in the region”.
He added: “The fact is it’s just not feasible to reasonably protect all ships in the region.” – BERNAMA-PA MEDIA/DPA
