Wall Street joined Europe as markets opened on Monday with losses spread across the board as tensions escalated across the Middle East.
The Dow Jones dropped nearly one per cent on open to 48,534.58 whilst the S&P 500 shed around 0.7 per cent to 6,828.47.
The tech-heavy Nasdaq tumbled 0.7 per cent to 22,505.32.
In London, the FTSE 100’s losses have extended throughout Monday’s trading session, all the way to a sharp 1.4 per cent drop.
This was led by steep drops in banks with Standard Chartered and Barclays both down over six per cent and British Airways owner IAG down over five per cent as airlines were forced to halt flights due to the conflict.
Losses came as oil prices continued to surge amid the unstable climate in the Middle East after the US struck Iran over the weekend.
During early trading on Monday, the cost of a barrel of brent crude – the international benchmark for oil prices – climbed 13 per cent to $82 on early Monday marking its highest level since July 2024 as concerns spiked over a significant amount of the world’s oil supply amid the attacks on Iran.
The rocketing price did help City oil majors Shell and BP, however with each surging on open before giving up some gains to fall back to a softer one per cent rally.
“Global stock markets have found themselves caught up in a bout of broad-based selling, with the FTSE 100 no exception,” says Chris Beauchamp, chief market analyst at IG.
“The index would be 50 points lower were it not for BP and Shell, which have surged as oil prices rocket skywards”.
‘Everything hinges on Strait of Hormuz’
Joint-strikes from the US and Israel killed the country’s Supreme Leader Ayatollah Ali Khamenei, with President Trump calling for citizens of Iran to use the opportunity to “take over”.
But fears have grown a hefty portion of the world’s oil supply may get swept up in the conflict, should navigation through the Strait of Hormuz be halted.
The strait provides the only sea passage from the Persian Gulf to the open ocean and is recognised as one of the world’s most strategically important choke points, which refers to a narrow maritime passage connecting two larger bodies of water, where high volumes of shipping traffic are forced to converge, often creating a bottleneck
It is estimated the ships crossing the Strait of Hormuz carry around one-fifth of global oil supplies at around 20 million barrels per day.
“From a global perspective, pretty much everything hinges on the Strait of Hormuz and the implications of any disruption to global energy flows,” John Wyn Evans, head of market analysis at Rathbones.
“Oil prices already reflect a sizeable risk premium, with current levels implying an expectation of a limited but meaningful interruption to shipping, but analysts note that the impact would worsen quickly if the closure were protracted, given the non‑linear nature of supply constraints.”
Former foreign secretary David Lammy previously warned that blocking the Strait of Hormuz would be a “catastrophic mistake” when the US and Iran engaged in a 12-day war last June.