European stocks opened slightly higher on Monday, as traders awaited another rise in oil prices above $100 a barrel as the conflict in Iran entered its third week.
By 12:04 (16:04 Saudi time), the European Stoxx 600 index had risen by 0.1%, the German DAX index had climbed by 0.1%, the French CAC 40 index had risen by 0.1%, while the British FTSE 100 index had gained 0.4%.
The joint US-Israeli offensive against Iran continued to inflame the wider Middle East. Saudi Arabia said it had intercepted more than 60 drones flying over the country, though the kingdom's defense ministry did not specify the origins or targets of these devices.
Meanwhile, US President Donald Trump called on seven countries to help Washington maintain security through the Strait of Hormuz, a vital waterway that handles a fifth of the world's oil supply. However, Trump did not say whether any of these countries had agreed to his request.
Tanker traffic through the strait, which is surrounded by Iran on three sides, has been effectively shut down by Tehran, causing a sharp rise in energy prices and casting a dark shadow over the outlook for the global economy in the process.
For Europe in particular, this halt threatens to reignite inflation in a region that, just months ago, was generally considered to have successfully contained price growth. Europe is a major importer of energy products that transit the strait, which could negatively impact an economy that recently experienced a recession.
With rising oil and gas prices, borrowing costs across the continent have also increased, partly reflecting concerns that the European Central Bank may have to reconsider raising interest rates again. The Stoxx 600 index has come under pressure, falling more than 5% from its pre-war peak.
The European Central Bank, along with a host of other global central banks including the Federal Reserve, is set to announce its latest monetary policy decision later this week. Despite the fighting in the Middle East, economists expect the ECB to keep interest rates unchanged for the remainder of 2026, according to a Reuters poll.
Crude oil prices rise
Oil prices rose in volatile trading on Monday as markets remained largely on edge about further supply disruptions coming from the Middle East.
Crude oil prices fell briefly after Trump called on other countries, including China, to help restore shipping through the Strait of Hormuz.
Brent crude futures, the global benchmark, rose 2.7% to $105.90 a barrel, while U.S. West Texas Intermediate crude futures climbed 2.0% to $98.75 a barrel by 12:06 pm (16:06 Saudi time). Oil had earlier surged as much as 3% before paring gains to trade more steadily for a brief period.
