European Stocks Open Lower as Iran War Uncertainty Persists
European markets started Thursday on a weaker note, as investors reacted to fast-changing developments surrounding the conflict involving Iran.
The pan-European Stoxx 600 fell 0.7%, while Germany’s DAX dropped 0.9%. France’s CAC 40 declined 0.5%, and the U.K.’s FTSE 100 slipped 0.6%.
Ceasefire Prospects Remain Uncertain
Reports indicate that Tehran is reviewing a 15-point peace proposal from the United States. However, there appears to be little immediate progress toward ending the conflict, which has now lasted nearly a month.
Trump Signals Desire for Quick Resolution
Donald Trump has reportedly told advisers that he wants to see a swift end to the war, suggesting the White House is seeking a path to de-escalation following its joint military actions with Israel.
However, Trump’s claims that Iran is eager to reach a deal contrast with statements from Iranian officials, who have ruled out direct negotiations aimed at ending hostilities.
Oil Prices Stay Elevated Amid Supply Concerns
Oil markets remain under pressure, with prices staying elevated due to fears of prolonged disruption in the Strait of Hormuz.
This key shipping channel handles roughly 20% of global oil and gas flows. Ongoing tensions and the threat of Iranian actions have effectively limited traffic through the strait, pushing crude prices higher and raising concerns about global inflation.
Central Banks Signal Possible Rate Hikes
Rising energy prices are beginning to influence monetary policy expectations. Christine Lagarde, head of the European Central Bank, suggested that interest rate increases could still be considered, even if inflation caused by the conflict proves temporary.
Brent Crude Remains Elevated Despite Pullback
Brent crude futures rose 2.8% to $105.04 per barrel. Although prices have eased slightly from last week’s peak of around $110—on hopes of a potential resolution—they remain significantly higher than levels seen before the conflict began in late February.
Risk Premium Likely to Persist
Analysts note that even if the conflict ends soon, oil prices may not immediately return to pre-war levels. Investors are expected to maintain a risk premium in the near term, reflecting ongoing uncertainty in global energy markets.
