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European stock markets traded without a clear direction at the start of Tuesday’s session, as rising oil prices and geopolitical tensions continued to weigh on investor sentiment.
By 04:03 ET (08:03 GMT), the pan-European Stoxx 600 slipped 0.1% to 598.08, while Germany’s DAX fell 0.3%, France’s CAC 40 was largely unchanged, and the U.K.’s FTSE 100 edged up 0.1%.
Oil gains pressure markets
Oil prices moved higher after several U.S. allies declined to support President Donald Trump’s call to help reopen the Strait of Hormuz, a critical global shipping route.
Brent crude futures rose 3.3% to $103.58 per barrel in early European trading, reflecting growing concerns over supply disruptions.
Countries including Japan, Germany, and Australia signaled they would not participate in efforts to secure the strait, complicating U.S. attempts to restore normal shipping operations.
Strait of Hormuz remains key risk
The Strait of Hormuz, through which roughly 20% of global oil supply flows, has become a focal point of the conflict between the United States, Israel, and Iran.
Following joint U.S.–Israeli strikes on Iran in late February, Tehran effectively shut down the waterway, warning it would attack any vessels attempting to pass.
Shipping activity has since been severely disrupted, as container companies suspend operations due to safety concerns and difficulties obtaining insurance coverage.
Inflation fears return
The surge in oil prices has reignited concerns about global inflation, which could force central banks to reconsider their policy outlook.
Higher energy costs tend to feed into broader price pressures, raising the risk that interest rates may need to remain elevated—or even rise further.
Central banks in focus
Investors are closely watching upcoming policy decisions from major central banks this week.
Both the European Central Bank (ECB) and the U.S. Federal Reserve are widely expected to keep interest rates unchanged, even as inflation risks increase due to rising energy prices.
With geopolitical tensions unresolved and oil markets volatile, European equities are likely to remain range-bound as investors balance growth concerns against inflation risks.
