European Stocks Slip as Middle East Tensions and Hormuz Threat Rattle Markets

European stock markets opened lower on Monday as escalating conflict in the Middle East fueled a broad risk-off sentiment, while Iran’s announcement that it had closed the Strait of Hormuz heightened fears of global energy supply disruptions.

The pan-European STOXX 600 index slipped 0.2% in early trading, mirroring weakness across most regional markets. Germany’s DAX fell 0.3%, France’s CAC 40 declined 0.2%, while the UK’s FTSE 100 bucked the trend with a modest 0.2% gain, supported by strength in energy stocks.

Oil and gas companies outperformed as crude prices surged. Shell advanced 1.8%, BP climbed 2.7%, and TotalEnergies gained 2.3% after Brent crude and West Texas Intermediate (WTI) crude futures jumped more than 4.4%. The rally followed Iran’s Revolutionary Guards announcing the closure of the Strait of Hormuz “until further notice” after a commercial vessel attack and subsequent U.S. military strikes.

Although U.S. Central Command disputed Iran’s claim, stating the strategic waterway remains open for lawful maritime traffic, investors remained concerned about the possibility of disruptions to one of the world’s most important oil shipping routes. Roughly one-fifth of global seaborne crude passes through the Strait of Hormuz, making any threat to the passage a significant driver of oil prices and market volatility.

The latest selloff reversed optimism seen late last week, when European equities rebounded on hopes of easing geopolitical tensions and continued strength in artificial intelligence-related technology stocks. If losses continue, much of those gains could be erased as investors shift toward defensive assets amid rising uncertainty.

Market participants are also awaiting comments from European Central Bank Executive Board member Isabel Schnabel later Monday. Investors will closely examine her remarks for clues on the ECB’s interest rate outlook, particularly as Schnabel is widely regarded as one of the central bank’s more hawkish policymakers and has consistently advocated a cautious approach to monetary easing.

Among individual stocks, Akzo Nobel jumped 3% after reports that Nippon Paint submitted an offer for the company’s decorative paints business, providing additional support to the chemicals sector despite the broader market weakness.