European stocks end lower as renewed Gulf tanker attacks rattle fragile US-Iran ceasefire

European stock markets closed lower on Monday as renewed attacks on commercial shipping in and around the Gulf of Oman fueled concerns that the fragile ceasefire between the US and Iran could collapse, reigniting fears over energy supplies and regional stability.

The pan-European Stoxx 600 index ended the day down 0.82% at 621.46 points, with most major sectors and bourses finishing in negative territory, while oil and gas stocks outperformed as crude prices surged on supply risk concerns.

Germany's DAX 40 fell 1.15% to end Monday at 24,417.80, the UK's FTSE 100 declined 0.55% to 10,609.08, and France's CAC 40 dropped 1.12% to 8,331.05.

Italy's FTSE MIB also lost 1.36% to end at 48,207.02, and Spain's IBEX 35 fell 1.21% to 18,260.90.

Investor sentiment weakened after US President Donald Trump said Sunday that a US Navy guided missile destroyer had fired on and disabled an Iranian-flagged cargo ship in the Gulf of Oman before US Marines boarded and seized the vessel.

The seizure marked a fresh escalation in maritime tensions after Iran reportedly fired on commercial vessels attempting to transit the Strait of Hormuz earlier the same day.

The latest developments came as the US has maintained a naval blockade on ships entering and leaving Iranian ports since last week. Tehran has described the blockade as a violation of the ongoing ceasefire and one of the reasons behind the collapse of expected negotiations scheduled for Monday in Islamabad.

Trump also warned on Sunday that Washington would target Iran’s infrastructure if Tehran failed to accept US terms to end the conflict, adding to market unease as the ceasefire is set to expire later this week.

Shipping concerns intensified after Iran, which had declared on Friday that the Strait of Hormuz was reopened to maritime traffic, reversed course on Saturday and again restricted vessel movements through the strategic waterway, with state media saying the US had not met its obligations.

The renewed tensions hit European travel and leisure stocks particularly hard, with the sector closing 2.5% lower after rallying in the previous session on hopes of easing disruption.

Lufthansa shares fell 3.4%, while EasyJet dropped 3.1% and TUI lost 3.1%.

Oil and gas shares, however, moved higher as traders priced in the risk of tighter global supplies. The sector rose 1.5%, led by Norwegian energy companies.

Equinor gained 1%, while Var Energi jumped 3.5%. BP rose 3%, TotalEnergies added 1.8%, and Shell climbed 2.4%.

Oil prices also advanced sharply, with Brent crude and US benchmark West Texas Intermediate both rising more than 5% during the session.