European stocks opened lower on Thursday, as hopes of a near-term ceasefire in Iran collapsed after U.S. President Donald Trump pledged to intensify military operations over the coming weeks, sending oil prices sharply higher.
As of 03:10 ET (07:10 GMT), the pan-European Stoxx 600 fell 1.2%, the DAX in Germany dropped 1.5%, the CAC 40 in France slid 1.2% and the FTSE 100 in the U.K. declined 0.7%, reversing a two-day rally that had added more than 2.5% to the regional benchmark on hopes the war was nearing its end.
Stay ahead of the latest European stock news with real-time updates and Wall Street commentary on InvestingPro Trump dashes ceasefire hopes Speaking from the White House on Wednesday evening, Trump offered no firm timeline for ending the five-week-old conflict and doubled down on threats of escalation in a prime-time address.
"We’re going to hit them extremely hard over the next two to three weeks," Trump said. "We’re going to bring them back to the Stone Ages where they belong."
He reiterated his threat to strike Iran’s electricity infrastructure if Tehran did not accept a deal. "If there is no deal, we are going to hit each and every one of their electric generating plants very hard, and probably simultaneously," he added.
Iran denied that any direct talks with Washington had taken place, and rejected Trump’s earlier claim that Tehran had requested a ceasefire.
Trump said the United States would not lead efforts to reopen the Strait of Hormuz, urging oil-dependent countries to secure access themselves or purchase U.S. energy, adding they could “just take it.”
Oil surges on prolonged supply fears Brent crude futures climbed over 6% to above $107 a barrel in early European trade, unwinding the prior session’s decline and reviving fears of a prolonged supply disruption through the Strait of Hormuz, the chokepoint for roughly a fifth of the world’s oil that Iran has effectively blocked since hostilities began in late February.
Brent has swung from around $70 a barrel before the war to a high of nearly $120, with each diplomatic and military turn driving sharp moves in either direction.
Corporate fallout: Energy and Aviation feel the strain In a sign that the energy industry is already repositioning around the disruption, Shell is in advanced talks with Venezuela to expand gas development across multiple offshore fields, targeting access to approximately 20 trillion cubic feet of reserves, Reuters reported.
The plan involves routing gas to Trinidad for LNG processing, boosting output at Atlantic LNG where Shell holds a key stake. Hurdles remain, including stake transitions from Chevron and complications arising from Russian-linked ownership in some of the fields under discussion.
The surge in energy costs is beginning to filter through to the aviation sector. Ryanair CEO Michael O’Leary warned that jet fuel supplies to Europe could face disruption from June if the Middle East conflict persists, raising the prospect of summer flight cancellations.
Airlines across the continent are already absorbing higher fuel costs tied to Strait of Hormuz disruptions, with contingency planning underway across the industry.
Lufthansa separately flagged early signs of supply tightness, particularly in Asia, where some airports are already limiting additional flights.
Despite the risks, Ryanair said it still expects modest fare increases and passenger growth, with no major pricing impact materialising yet.
Gold retreats, Silver slips Gold pulled back on Thursday after jumping 2% in the prior session on ceasefire hopes.
Spot gold fell 3.5% to $4,643 per ounce, adding to a steep decline from its January all-time high of $5,602, as surging oil prices stoked inflation fears, kept bond yields elevated and strengthened the dollar, all of which weigh on the non-yielding metal. Silver fell 6.9% to $70.77 per ounce.
