US Seizes Iranian Oil Tanker, Prices Spike

Global oil prices rose on Monday while European equities fell after the U.S. seized an Iranian vessel near the Strait of Hormuz, a key route for energy shipments. The move, announced by Donald Trump, was followed by a sharp shift in risk sentiment across markets. The incident reduced expectations for a peace deal and contributed to renewed volatility, according to the market reaction described.

Brent crude, the main international benchmark, climbed 5% to $95.50 a barrel. At the same time, major European stock indices moved lower, with the FTSE 100, French Cac 40, German Dax, and Stoxx Europe 600 each declining by roughly 0.5% to 1%. The Strait of Hormuz is described as a critical shipping lane through which about one-fifth of the world’s oil and gas passes, making any disruption there closely watched by energy traders and policymakers.

Sector moves in Europe reflected concerns about fuel availability and travel. Airline shares fell, with IAG, Wizz Air, and Ryanair down between 3.3% and 4.9% amid fears of international travel disruption and potential jet fuel shortages. In contrast, energy majors benefited from the higher oil price backdrop, as BP and Shell shares rose by more than 2%.

The market swing reversed part of Friday’s move, when oil prices dropped 9% after Iran indicated it would reopen the Strait of Hormuz during a ceasefire. Monday’s repricing followed reports of Iran’s Revolutionary Guards firing on tankers and Tehran declining to join a second round of negotiations, which added to investor unease.

The source material also links the latest developments to concerns that a ceasefire in the ongoing conflict in Iran could fail, a risk that has already affected global energy markets.

Natural gas and agricultural markets also reacted. UK wholesale gas prices rose 5.8% to 102p a therm. In the U.S., Chicago wheat futures gained 1.7% to $6.09-1/4 a bushel, driven by worries about possible fertilizer shortages and broader global food security.