European stocks rise as oil eases after strongest weekly surge since 2022

Friday 06 March 2026 - 12:50

By: Dakir Madiha

European stocks rise as oil eases after strongest weekly surge since 2022

European stock markets opened higher on Friday while oil prices edged lower, offering investors brief relief after a week of sharp volatility driven by the escalating conflict involving Iran. The broader market mood remained cautious as the confrontation between the United States and Israel on one side and Iran on the other continued to disrupt global energy markets and unsettle investor confidence.

Oil prices dominated market movements throughout the week. Brent crude has risen roughly 24 percent over the past month, according to Trading Economics, after military strikes by the United States and Israel against Iran on February 28 triggered retaliatory attacks across the Gulf region.

The conflict has effectively shut down the Strait of Hormuz, a key shipping route through which about 20 percent of the world’s seaborne oil and liquefied natural gas passes. According to Reuters, Iran has targeted vessels and warned commercial ships to avoid the waterway, sharply raising concerns about supply disruptions.

On Thursday, US West Texas Intermediate crude jumped more than 8 percent to its highest level since mid 2024, while Brent crude climbed above $85 per barrel, according to The Wall Street Journal.

OPEC+ producers announced plans to increase output by about 206,000 barrels per day starting in April. However, analysts say additional production may have limited effect if shipments cannot move through the Gulf region. A Rystad Energy analyst told NPR that restricted flows through the Gulf would limit the immediate benefit of higher supply.

US President Donald Trump said the US Navy could escort oil tankers through the Strait of Hormuz if necessary. He also directed the US International Development Finance Corporation to provide financial guarantees to support maritime trade in the Gulf, Reuters reported.

US equities ended Thursday’s session lower. The Dow Jones Industrial Average dropped 1.6 percent to its lowest level in nearly three months, while the S&P 500 fell 0.6 percent and the Nasdaq Composite declined 0.3 percent. The Dow is now heading toward its worst weekly performance since October, according to CNBC.

Rising Treasury yields added pressure on equities as higher energy prices revived concerns that the Federal Reserve could delay interest rate cuts.

Asian markets showed sharp swings. South Korea’s Kospi surged nearly 10 percent on Friday after President Lee Jae Myung activated a $68 billion market stabilization fund, recovering much of the record loss from the previous session. India’s Sensex fell roughly 1,100 points, weighed down by financial stocks, according to Moneycontrol.

Japanese and Korean shares had earlier opened lower as rising oil prices and concerns about potential US restrictions on exports of artificial intelligence chips dampened investor sentiment, Bloomberg Television reported.

The geopolitical crisis is also complicating the outlook for central banks. Policymakers already navigating fragile economic conditions now face the risk of a new oil driven inflation shock that could disrupt plans to ease monetary policy.

Investment firm Bernstein raised its Brent oil forecast for 2026 to $80 per barrel but warned prices could reach between $120 and $150 if the conflict persists, according to Reuters.

Investors are now watching the February US employment report for signals about the resilience of the labor market amid growing economic uncertainty.