European oil stocks moved higher on Monday after the United States and Iran exchanged fresh strikes over the weekend.
Iran also said it had once again closed the Strait of Hormuz, increasing concerns about global energy supplies.
U.S.-Iran Tensions Put Ceasefire Deal at Risk
The renewed fighting has raised doubts about an interim agreement signed by the United States and Iran last month.
That deal aimed to reopen the Strait of Hormuz and create a path toward ending the conflict after another 60 days of negotiations.
However, the latest attacks have weakened confidence that the agreement will hold.
Oil Prices Rise on Supply Concerns
Crude oil prices climbed sharply following the latest developments.
Brent crude futures rose 2.9% to $78.24 per barrel by 04:25 ET, or 08:25 GMT.
Meanwhile, U.S. West Texas Intermediate crude gained 2.7% to trade at $73.34 per barrel.
Investors reacted to the possibility that further disruption in the Strait of Hormuz could reduce global oil and gas shipments.
European Energy Stocks Rally
The STOXX Europe 600 Oil & Gas index gained 1.2%.
The sector ranked among the strongest performers on the wider STOXX Europe 600 index.
Higher oil prices often support energy companies because they can increase revenue and profit expectations for producers.
Shell, BP and Repsol Move Higher
Several major European oil companies posted gains.
OMV rose about 1%, while Repsol climbed roughly 2%.
TotalEnergies, Maurel & Prom, Eni and Equinor advanced between 1% and 2.1%.
Shell shares gained 1.1%, while BP rose 2.3%.
The broad rally reflected expectations that geopolitical tensions could keep energy prices elevated.
Iran Targets U.S. Facilities in the Gulf
The market move followed a weekend of escalating military action.
Iran struck U.S. facilities across the Gulf on Sunday.
On Monday, Iran’s Revolutionary Guards said they had also targeted American military bases in Kuwait and Bahrain.
The attacks increased concerns that the conflict could spread further across the region.
Strait of Hormuz Traffic Falls
Shipping activity through the Strait of Hormuz declined sharply.
The waterway carried around one-fifth of the world’s daily oil and liquefied natural gas supply before the conflict began in late February.
According to ship-tracking company Kpler, vessel traffic through the strait fell to its lowest level in five weeks on Sunday.
Only six vessels completed the crossing.
Energy Markets Remain on Alert
The latest developments have increased uncertainty across global oil markets.
Any prolonged closure of the Strait of Hormuz could create major supply disruptions and push crude prices higher.
Investors will now closely monitor shipping activity, further military developments and any signs that diplomatic talks may resume.
