Oil prices edged higher as markets continued to react to escalating tensions in the Middle East. Brent crude rose 0.45% to $81.77 a barrel, while European gas futures fell 8%, though they remained about 58% higher than levels seen last Friday.
Equity markets moved higher despite the volatility. In the US, the S&P 500 gained 0.79%, the Nasdaq Composite jumped 1.3%, and the Dow Jones Industrial Average rose 0.49%. In London, the FTSE 100 climbed 0.8%.
Meanwhile, diesel prices in the US surged to their highest level since October 2023, raising concerns about renewed pressure on household budgets. Diesel futures jumped 23% during the first two days of the week to reach $3.19 per gallon, according to FactSet.
Shipping activity through the Strait of Hormuz has also collapsed. Data from Windward shows that vessel traffic has fallen by about 95%, with just four ships passing through the waterway on Tuesday compared with a seven-day average of 77 before the conflict began.
Iran’s Islamic Revolutionary Guard Corps declared the strait closed earlier this week and warned it would target any commercial vessels attempting to pass through the route. The situation has been worsened by the insurance market, with several maritime insurers withdrawing war-risk extensions for ships operating in the Gulf region.
