European stock indexes searched for a clear direction at the start of trading on Tuesday, with oil prices rising after several U.S. allies rejected President Donald Trump's request for help in reopening a vital waterway in southern Iran.
By 11:03 (Saudi time), the Stoxx 600 index had fallen 0.1% to 598.08, the German DAX index had declined 0.3%, while the French CAC 40 index remained virtually unchanged, and the British FTSE 100 index had risen 0.1%.
Brent crude futures, the global benchmark, jumped 3.3% to $103.58 in early European trading after Japan, Germany and Australia indicated they would not join U.S. efforts to reopen the Strait of Hormuz, a key chokepoint for global shipping through which one-fifth of the world’s oil production passes.
After the start of the joint US-Israeli strikes on Iran in late February, Tehran moved to close the narrow strait by threatening to attack any ship attempting to pass through. Container companies, keen to protect their crews and struggling to find insurance for the voyages, suspended many shipments.
Oil prices rose as a result, raising concerns about renewed inflationary pressures worldwide that could force central banks to reconsider raising interest rates. Faced with the prospect of rising inflation, the European Central Bank is expected to leave interest rates unchanged at the conclusion of its monetary policy meeting this week, as is the US Federal Reserve.
