Brent crude rises 3.78% to $78.88 following the military escalation between the US and Iran that has blocked the Strait of Hormuz. European markets open mixed, with the Ibex 35 dropping 0.40%.
The military escalation in the Middle East has placed oil at the centre of financial markets this Monday. Brent crude, the European benchmark, has risen 3.78% to $78.88 after Iran announced the blockade of the Strait of Hormuz and the United States responded with a new offensive. West Texas Intermediate (WTI) has also increased 3.75% to $74.09.
European markets react to the Hormuz crisis
European markets opened with an uncertain direction and mixed signs. The Ibex 35 began the session with the largest drop on the continent, down 0.40%, followed by Milan (-0.13%) and Paris (-0.11%). In contrast, Frankfurt rose 0.28% and London 0.24%. The Euro Stoxx50, which groups major European companies, fell 0.27%.
The uncertainty surrounding maritime traffic in the Strait of Hormuz has frustrated the bullish expectations that had settled in the markets due to the start of the earnings season in the United States. Donald Trump stated on Sunday that the route remains open, but Iran insists it is blocked, creating a fragility in the ceasefire that rekindles fears of an escalation of the conflict.
Natural gas and commodities also surge
Natural gas TTF, the European benchmark, has risen 3.64% to €50.42 per megawatt-hour. Gold, on the other hand, has fallen 1.32%, now below $4,100 per ounce, specifically at $4,057.1. The euro remains stable against the dollar, at $1.14 per euro.
In the debt market, the yield on the ten-year German bond rises to 3.052% and the Spanish one to 3.533%. Bitcoin has decreased by 2.03%, to $62,864.9.
Asian markets plunge due to oil dependency
The hardest impact has been seen in Asia. The Kospi index in Seoul has plummeted 8.95%, as South Korea imports most of its oil through the Strait of Hormuz. The Nikkei in Tokyo has fallen 1.92%, Shanghai by 2.06%, and Shenzhen by 3.48%. The Hang Seng in Hong Kong, however, has risen 0.14% pending the close.
Wall Street futures indicate a negative opening: the Nasdaq is down 1.20%, the S&P 500 0.42%, and the Dow Jones 0.10%.
For investors, the recommendation is to exercise extreme caution amid volatility. The Hormuz crisis directly affects oil prices and, therefore, the energy costs for companies and household consumption. Analysts advise reviewing exposure to oil-sensitive sectors, such as transportation or petrochemicals, and maintaining defensive positions until the geopolitical horizon becomes clearer.
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