European energy shares rise as Middle East escalation pushes crude toward $100

Oil-related stocks in Europe rallied on Tuesday as the latest clashes in the Middle East stoked worries of a broader regional war and lifted crude prices to levels not seen since late July.

By 04:09 ET (08:09 GMT), Brent crude futures were up 2.1% at $99.93 per barrel, while US West Texas Intermediate crude advanced 1.4% to $94.31. A move back toward $100 is likely to unsettle markets that have spent much of the year contending with inflation worries.

The STOXX Europe 600 Oil & Gas Index consequently advanced 0.8%, leading sector gains on the broader Stoxx 600.

Among individual stocks, TotalEnergies, Eni, Neste and Galp Energia moved between 1.2% and 1.9% higher. Maurel & Prom edged up 0.8%, Equinor rose 3.1%, Repsol added 2.1%, and Shell and BP climbed 1.2% and 1.8%, respectively.

The growing tensions follow strikes by Iranian-backed Houthi forces in Yemen on several Saudi cities, drawing a key US ally deeper into the six-month-old conflict. In a sharp intensification of hostilities, US forces struck multiple Iranian oil tankers while Iran targeted a US base in Jordan and attacked shipping vessels.

The fresh assaults could intensify supply disruptions across Middle East oil markets, which have already felt the impact of strikes on energy infrastructure and critical shipping lanes.

Brent crude has gained roughly a quarter since early August, after hopes for a durable end to the conflict fell away and violence resumed.