London’s main stock market experienced a sharp decline at the start of trading on Monday as an escalating oil crisis triggered a global sell-off among investors.
The FTSE 100 fell by 181 points, reaching 10,103.71 within the first ten minutes of the session—a decrease of 1.8 per cent, marking one of the steepest early declines since January.
Mid-cap stocks were even more adversely affected, with the FTSE 250 sliding 2.3 per cent as investors moved away from riskier assets.
A sudden supply shock unsettled the markets after Iran announced measures to block shipping through the Strait of Hormuz, a strategic channel through which approximately one-fifth of global oil supplies pass.
This disruption caused oil prices to surge, with the global benchmark Brent crude rising more than 25 per cent and briefly reaching $120 per barrel as Asian markets opened.
This marked the largest single-day increase in six years. Currently, prices are around $118–$119 per barrel, nearing levels not seen since 2022, when Russia’s invasion of Ukraine triggered a worldwide energy crisis.
Not all companies were negatively impacted by the market turmoil; energy majors BP and Shell both saw their shares rise about 2 per cent, benefiting from the rise in oil prices. In contrast, mining stocks faced significant losses as commodity markets weakened. Shares of Anglo American fell 6.3 per cent, while Antofagasta dropped 5.7 per cent as copper prices declined to three-week lows.
Travel companies were severely affected amid concerns that rising fuel prices could dampen demand. Shares in International Airlines Group, the owner of British Airways, fell by about 5 per cent as investors factored in rising aviation fuel costs. Banking stocks also came under pressure amid concerns that elevated energy prices could trigger a broader economic slowdown. Barclays shares dropped around 3 per cent, while Lloyds Banking Group retreated by roughly 2 per cent.
Additionally, on the blue-chip index, luxury brand Burberry declined 4 per cent. In comparison, aerospace engineer Rolls-Royce Holdings fell 6 per cent, making it one of the largest losers of the morning.
European markets mirrored London’s losses. Germany’s DAX fell by 2.5 per cent, while France’s CAC 40 dropped by 2.4 per cent as investors reacted to the worsening crisis in the Middle East. Analysts warned that if energy markets remain volatile, the effects could spill over into the broader global economy, raising the risk of renewed inflation and slowing growth across major economies.
