European stocks opened marginally higher on Monday, with traders eyeing another climb in oil prices above the $100 a barrel level as the conflict in Iran entered a third week.
Track European stocks with InvestingPro By 04:04 ET (08:04 GMT), the pan-European Stoxx 600 had edged up by 0.1%, the Dax in Germany had moved up by 0.1%, the CAC 40 in France had climbed 0.1%, and the FTSE 100 in the U.K. had gained 0.4%.
A joint U.S.-Israeli assault on Iran has continued to engulf the wider Middle East. Saudi Arabia has said it intercepted more than 60 drones flying over the country, although the Kingdom’s defense ministry did not specify the devices’ origins or targets.
Meanwhile, U.S. President Donald Trump has called on seven nations to help Washington maintain security through the Strait of Hormuz, a vital waterway that hosts a fifth of the world’s oil supply. However, Trump did not say if any have agreed to his request.
Tanker traffic in the strait, which is surrounded on three sides by Iran, has been effectively closed by Tehran, sending energy prices sharply higher and darkening the outlook for the global economy in the process.
For Europe, in the particular, the stoppage threatens to reignite inflation in a region which only months ago was viewed as having broadly corralled price growth. Europe is a major importer of energy products that traverse the strait, potentially weighing on what has been a recently stagnate economy.
As oil and gas prices have spiked, so too have borrowing costs in the continent, partly reflecting worries that the European Central Bank may be forced to once again consider interest rate hikes. The Stoxx 600 have been put under pressure, sliding by over 5% from its pre-war peak.
The ECB, along with a raft of other global central banks including the Federal reserve, will announce its latest monetary policy decision later this week. Despite the fighting in the Middle East, economists expect the ECB keep rates steady for the rest of 2026, according to a Reuters poll.
“Central banks are not expected to make major changes to monetary policy this month, but watch closely for how the Fed and others assess the inflation outlook after the surge in oil prices,” Laurence Booth, Global Head of Markets at CMC Markets, told Investing.com.
Crude rises
Oil prices rose in whipsaw trade on Monday as markets remained largely on edge over more supply disruptions out of the Middle East.
Crude had briefly fallen after Trump called on other countries, including China, to help restore shipping through the Strait of Hormuz.
Brent oil futures -- the global benchmark -- rose 2.7% to $105.90 per barrel, while U.S. West Texas Intermediate crude futures rose 2.0% to $98.75 a barrel by 04:06 ET. Oil had earlier risen as much as 3% before trimming gains to briefly trade flat.
