European stocks edged lower at the start of trading on Thursday, as oil prices once again briefly jumped above $100 a barrel amid ongoing shipping disruptions caused by the Iran war.
Track European stocks with InvestingPro By 04:04 ET (08:04 GMT), the pan-European Stoxx 600 had dipped by 0.4%, the Dax in Germany has dropped 0.2%, the CAC 40 in France had declined 0.5%, and the FTSE 100 in the United Kingdom had fallen 0.5%.
Oil futures spiked, extending a bout of volatility in crude despite efforts by the International Energy Agency to roll out its largest-ever release of strategic oil reserves to help quell the fluctuations.
The U.S. has also said it would tap its own oil reserves, although analysts have flagged that the moves may only provide a temporary respite — and only a reopening of tanker traffic through the vital Strait of Hormuz waterway will offer relief for markets shorn of key supplies.
A fifth of the world’s oil supply flows through the narrow choke point south of Iran, but sailings have come to a virtual standstill as Tehran threatens to attack most vessels attempting to traverse the strait.
Reports have suggested that Iran has also laid naval mines, while the U.S. Navy has not committed to escorting ships due to safety concerns.
Traffic through the strait has come to virtual standstill, denting oil flows, driving up crude prices, and fueling fears over a possible spike in inflationary pressures around the globe. Europe, as well as Asia, are particularly big importers of oil and gas that passes through the strait, leaving the regions exposed to the more than week-old U.S. and Israeli assault on Iran.
At 04:05 ET, the Brent futures contract, the global benchmark, had risen by 4.3% to $95.92 a barrel, while U.S. West Texas Intermediate had gained 3.8% to $90.54 per barrel.
