Israel-Iran conflict fuels best month for energy stocks since 2022
The European energy sector is staging its strongest rally in years as escalating hostilities between Israel and Iran stoke fears of supply disruptions. The conflict is sending oil prices and energy shares sharply higher across the continent.
The Euro STOXX 600 Energy index, which tracks major European oil and gas firms including BP, TotalEnergies, Eni and Repsol, has surged nearly 8% month-to-date, on track for its strongest monthly gain since October 2022.
The rally stands in stark contrast to the broader Euro STOXX 600 index, which has declined by 1% over the same period.
This 9 percentage point gap marks the sector's widest monthly outperformance since May 2022, underscoring the market's sharp pivot towards energy names as investors brace for prolonged geopolitical tensions in the Middle East.
BP shares have climbed 9% so far in June, on course for their best month since September 2023.
Italy's Eni has gained 9.1%, its strongest monthly showing since October 2022, while France's TotalEnergies is up 7%, a level last seen in April 2024.
Portuguese energy company Galp Energia has led the sectoral gains with a 12% jump.
The surge in energy equities mirrors a significant rally in oil prices. Brent crude has spiked to $75 a barrel, up 20% this month. That marks the largest monthly increase since November 2020, when news of successful COVID-19 vaccine trials first lifted global markets.
Related
Trump demands Iran's 'unconditional surrender' again as conflict with Israel continues
Israel starts flying home citizens stranded abroad during conflict with Iran
Iran asks its citizens to delete WhatsApp from their devices
Tehran residents flee as Israel-Iran conflict continues for fifth day
Oil prices may stay higher for longer, with analysts warning that the geopolitical risk premium now embedded in crude markets could persist.
Following Israeli airstrikes on Iranian nuclear and military targets, Tehran has raised the spectre of a potential closure of the Strait — a move that would choke off nearly 20 million barrels per day of crude and refined products, according to the International Energy Agency (IEA). While a complete shutdown remains unlikely, even limited disruptions could unsettle markets.
'There's the potential for disruptions to shipping through the Strait of Hormuz,' said Warren Patterson, head of commodities strategy at ING.
According to the expert, almost a third of global seaborne oil passes through this checkpoint and any material threat to that route sends an immediate signal to energy markets.
Patterson indicated that in the event of a significant disruption to flows through the Strait of Hormuz, oil prices could surge to $120 per barrel.
On Tuesday, President Donald Trump convened a high-stakes meeting with his national security team inside the White House Situation Room to discuss the possibility of US military involvement alongside Israel in its war against Iran.
Earlier that day, Trump had abruptly departed the G7 summit in Canada, fuelling speculation that a major foreign policy shift was imminent.
Although no official decision has yet been announced, Iran issued a clear warning that it would target US military bases across the Middle East if Washington entered the conflict.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
20 minutes ago
- Yahoo
Once Considered Passé, Hybrids Roar Back as a Best-of-Both-Worlds Powerhouse
Regardless of the industry, pendulum swings are a challenge to navigate. In 2021, automakers faced one such shift when the European Commission passed legislation requiring a 55 percent reduction in the continent's greenhouse-gas emissions within five years. In response, many marques turned to hybrids as a bridge to an all-electric future. What was once perceived as a temporary fix may, however, prove to be the golden mean. 'The charging infrastructure in most countries is not yet mature enough to support convenient mass adoption of battery-electric vehicles, and in some territories never will be,' says Jonathan Hall, head of research and advanced engineering at U.K.-based consulting group Mahle Powertrain. While Hall stops short of calling hybridization ideal, he notes that 'when extreme performance is needed, then hybrids provide a more compelling answer.' More from Robb Report Flash Is Back: Extravagance Returns to Menswear Amid Economic Upheaval Forget Tearing Down the House. Regenerative Design Is on the Rise. How Sullivan Rutherford Estate Made the Best American Cabernet Sauvignon of the Year Luxury and high-performance automakers seem to agree. Pairing an internal-combustion engine (ICE) with battery power results in more of a complement than a compromise. 'It preserves the sound signature and continuous high-speed power delivery of combustion engines while leveraging electric propulsion's instantaneous torque response and precision,' says Emilio Scervo, CTO of hypercar-builder Bugatti Rimac. Regarding Bugatti's new 1,800 hp Tourbillon hybrid, he adds that 'the electrical system enables sub-millisecond torque vectoring that mechanical differentials cannot match.' Bugatti's siblings under the Volkswagen Group echo this sentiment. 'Hybrids haven't been a transitory technology in our view, but rather an excellent solution for our customers,' says Thomas Wasserbäch, vice president of Porsche's combustion and hybrid-drive-system division. Porsche, active in this space since 2010, just hybridized its iconic 911 for this model year. Lamborghini also joined the trend with the debut of its 1,000 hp Revuelto hybrid in 2023. 'The company doesn't plan to give up the internal-combustion engine anytime soon,' says CTO Rouven Mohr. 'We are also considering synthetic fuels to keep ICE vehicles running after 2030.' Hall concurs: 'With the emergence of bio-based and even fully synthetic fuels, the link between the ICE and climate change can be broken.' Combined with the development of better batteries, this progressive hybrid model could offer the best of both worlds for years to come. Best of Robb Report The 2024 Chevy C8 Corvette: Everything We Know About the Powerful Mid-Engine Beast The World's Best Superyacht Shipyards The ABCs of Chartering a Yacht Click here to read the full article.
Yahoo
27 minutes ago
- Yahoo
Mike Lynch's superyacht Bayesian lifted from the sea for tragic sinking probe
Tech tycoon Mike Lynch's superyacht has been lifted from the sea and taken to a town for investigations into the sinking that killed seven people. Billionaire Mr Lynch, 59, was one of the victims alongside his daughter Hannah, 18, when the Bayesian sank off Sicily last August 19. Morgan Stanley International bank chairman Jonathan Bloomer, 70, and his wife, Judy Bloomer, 71, also died, with inquests due to be held for the British nationals. READ MORE: Foreign Office issue stream of travel alerts following US strikes on Iran READ MORE: Which food and drinks are banned on TUI, easyJet, Ryanair and Jet2 flights? Fifteen people including Mr Lynch's wife, Angela Bacares, were rescued. British and Italian authorities are due to carry out a full probe into the yacht's sinking. The vessel was held above the water by one of Europe's most powerful floating sea cranes, which set off from the fishing village Porticello at around 1.10pm local time today (June 22). It was held in front of the crane as it moved. The vessel arrived in Termini Imerese, a town around 12 milies away at just after 3pm on Sunday. It will then be moved into a specially manufactured steel cradle, which has a tarpaulin underneath for pollution prevention. Salvage workers on site, not accompanying the vessel to port, are conducting a 'full sweep' of the seabed near Porticello for any potential debris, a project insider said. Italian prosecutors previously said raising and examining the yacht for evidence would provide key information for its investigation into the sinking. It will also aid the Marine Accident Investigation Branch (MAIB) report on what happened. Simon Graves, an MAIB investigator, previously told the PA news agency: "When the wreck is brought ashore, we'll be completing a full examination of the wreck and we'll be finding out all of the elements that might have contributed to the safety of the vessel." Further details such as 'escape routes' will be included in its final report on the sinking, according to Mr Graves, who added: "Once we get access to the vessel we'll be able to tell a fuller picture of activities on board and the sequence of events." The vessel was originally expected to be raised last month but salvage efforts were delayed after a diver died during underwater work on May 9, prompting greater use of remote-controlled equipment. About 70 specialist personnel had been mobilised to Porticello from across Europe to work on the recovery operation. Join the Manchester Evening News WhatsApp group HERE Mr Lynch and his daughter were said to have lived in the vicinity of London and the Bloomers lived in Sevenoaks, Kent.
Yahoo
38 minutes ago
- Yahoo
Oil prices expected to rise after US attack on Iran
Oil prices are expected to rise as the trading week starts, after the US attack on Iran stoked fears of an escalating regional conflict that could shut down the vital strait of Hormuz shipping route. A barrel of Brent crude was selling for about $77 on Friday, having risen by more than 10% since mid-June, when Israel's attack on Iranian nuclear sites prompted missile strikes from Tehran against Tel Aviv. President Donald Trump's decision to follow Israel in launching an attack on Iran over the weekend could drive prices up by a further $5 when markets open, according to forecasts from oil market analysts. Trading for the week begins at 11pm UK time on Sunday. 'An oil price jump is expected,' said Jorge Leon, head of geopolitical analysis at the energy intelligence firm Rystad and a former official at Opec, the group of major oil-producing nations. 'In an extreme scenario where Iran responds with direct strikes or targets regional oil infrastructure, oil prices will surge sharply. 'Even in the absence of immediate retaliation, markets are likely to price in a higher geopolitical risk premium.' Brent crude, the traditional benchmark global oil price, could gain $3 to $5 per barrel when markets open, SEB analyst Ole Hvalbye said in a note. Wall Street bank JP Morgan has previously forecast that the oil price could rise as high as $130 in the event that a sustained Middle East conflict closes the strait of Hormuz. Iranian officials have previously threatened to block the Strait, the conduit for a fifth of global oil consumption, if Tehran's interests are threatened. Any such retaliation could have huge knock-on effects for the global economy, with the resulting oil price shock risking a period of high inflation, as motorists pay more for petrol and the cost of transporting goods soars. Brent crude settled at $77.01 a barrel on Friday, while the US West Texas Intermediate (WTI) benchmark was at $73.84. Some analysts played down the risk of long-term disruption to shipping routes, pointing out that most of Iran's oil exports to China pass through the strait of Hormuz. If oil prices were to rise to $130, that would exceed levels reached in the aftermath of Russia's invasion of Ukraine. The all-time high for Brent crude is $147.50, set in July 2008 just before the global financial crisis sent prices plunging. Sign in to access your portfolio
