Fears the escalating conflict in Iran is choking off crude supplies triggered the surge in prices.
Benchmark Brent crude, a standard global oil price, soared by 17pc to more than $108 as European markets opened, having at one stage reached nearly $120 dollars, a price not seen since the summer of 2022 and the immediate wake of Russia’s invasion of Ukraine.
News in 90 seconds – March 9th
Over the weekend analysts at Goldman Sachs warned that crude could hit $150 a barrel, if the war becomes prolonged.
That looks increasingly likley, as US President Donald Trump mulled the potential for US ‘boots on the ground,’ and Iran named Mojtaba Khamenei, the hardline son of its late supreme leader, to succeed him.
Iranian missile and drone attacks targetting regional energy infrastructure and blocking the crucial Strait of Hormuz shipping route continued through the weekend.
Bahrain’s oil producer BAPCO announced a `so called ‘force majeure’ following a recent attack on its refinery complex.
At one point overnight oil prices were up by almost a third but came back after after the Financial Times reported that the Group of Seven (G7) finance ministers and the International Energy Agency will discuss on Monday a joint emergency oil reserves release, and Saudi Aramco offered prompt crude supply through a series of rare tenders.
The French government then confirmed the possibility of releasing strategic oil reserves would be discussed at a virtual meeting of Group of Seven finance ministers on Monday.
France, which has the rotating presidency of the G-7, had scheduled a call at 13:30 CET to discuss the economic consequences of the Middle East war.
As energy prices surged stock markets fell. In Dublin the Iseq index of Irish shares was down almost 2pc within minutes of opening.
The big two banks, AIB and Bank of Ireland, as well as Ryanair seeing sharp falls.
In London, the FTSE 100 Index fell nearly 2pc soon after opening.
The blue chip share index was 181 points lower, down 1.8pc, at 10103.71 within the first 10 minutes after trading opened.
European shares slumped to their lowest in over two months on Monday, as surging oil prices exacerbated inflation worries with the US- Israeli war on Iran showing no signs of slowing down.
The pan-European benchmark fell for the third session, down 2.34pc at 585.08 points by 08.10am. The index fell 5.5pc last week, marking it’s worst week in nearly a year.
In Europe, banks, which were in the epicenter of the sell-off last week, extended declines with a 3.2pc fall.
Tech stocks fell 3.1pc.
Carriers Lufthansa and Air France KLM fell 3.9pc and 5.2pc, respectively.
On the flip side higher crude prices pushed energy 0.1pc higher, while defense firm Leonardo added 1.4pc.
Attention will now shift to the potential political responses. Finance Minister Simon Harris and hos fellow euro zone finance ministers are due to meet at Eurogroup later in the day.
The European Central Bank will also be represented there, as bets on rate hikes this year intensify.
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