Oil prices surged by more than 5% on Tuesday after the United States and Iran traded fresh strikes around the Strait of Hormuz, and US President Donald Trump said the shaky ceasefire was “over”. Brent crude, the global benchmark, climbed to $77.86 a barrel after hitting a daily high of $79.26.
The jump in energy costs rattled global stock markets. In London, the FTSE 100 fell 1%, or 110 points, to 10,556, while Germany’s Dax dropped 1.6% and Spain’s Ibex lost 2%. On Wall Street, the S&P 500 fell nearly 0.5%, the Dow Jones slid 0.9% and the Nasdaq slipped 0.3%. Asian markets also declined, with Japan’s Nikkei ending 2.1% lower, China’s CSI 300 down 0.77% and South Korea’s Kospi tumbling 5.5% amid a semiconductor sell-off.
The oil price rise stoked inflation fears, pushing eurozone government bond yields to their highest levels in almost a month. The yield on Germany’s 10-year bond rose 5 basis points to 3.034%, the highest since 11 July, while the two-year yield climbed 5 basis points to 2.637%. The yield on the 10-year UK gilt rose 9 basis points to 4.94%.
Energy stocks such as BP, Shell and Centrica led gains on the FTSE 100, while travel shares fell on concerns over fuel costs. Analysts said the key question was whether the latest escalation marks a complete breakdown in negotiations or a temporary setback. Technology stocks remained under pressure as investors reassessed the AI boom.
In a separate development, the Dutch prosecutor’s office said it is bringing criminal proceedings against Tata Steel’s Dutch subsidiary over alleged deliberate discharge of harmful substances. The firm is accused of failing to carry out sufficient maintenance, operating without authorisation and failing to report incidents involving raw coke. Tata Steel IJmuiden said it took the concerns seriously and would continue improvement measures.
