Israel-Iran conflict fuels best month for energy stocks since 2022

Published on 18/06/2025 - 16:04 GMT+2

The European power assemblage is staging its strongest rally successful years arsenic escalating hostilities betwixt Israel and Iran stoke fears of proviso disruptions. The conflict is sending lipid prices and power shares sharply higher crossed nan continent.

The Euro STOXX 600 Energy index, which tracks awesome European lipid and state firms including BP, TotalEnergies, Eni and Repsol, has surged astir 8% month-to-date, connected way for its strongest monthly summation since October 2022.

The rally stands successful stark opposition to nan broader Euro STOXX 600 index, which has declined by 1% complete nan aforesaid period.

This 9 percent constituent spread marks nan sector’s widest monthly outperformance since May 2022, underscoring nan market’s crisp pivot towards power names arsenic investors brace for prolonged geopolitical tensions successful nan Middle East.

BP shares person climbed 9% truthful acold successful June, connected people for their champion period since September 2023.

Italy’s Eni has gained 9.1%, its strongest monthly showing since October 2022, while France’s TotalEnergies is up 7%, a level past seen successful April 2024.

Portuguese power institution Galp Energia has led nan sectoral gains pinch a 12% jump.

The surge successful power equities mirrors a important rally successful lipid prices. Brent crude has spiked to $75 a barrel, up 20% this month. That marks nan largest monthly summation since November 2020, erstwhile news of successful COVID-19 vaccine tests first lifted world markets.

Inflated lipid prices

Oil prices whitethorn enactment higher for longer, pinch analysts informing that nan geopolitical consequence premium now embedded successful crude markets could persist.

Following Israeli airstrikes connected Iranian atomic and subject targets, Tehran has raised nan spectre of a imaginable closure of nan Strait — a move that would choke disconnected astir 20 cardinal barrels per time of crude and refined products, according to nan International Energy Agency (IEA). While a complete shutdown remains unlikely, moreover constricted disruptions could unsettle markets.

“There’s nan imaginable for disruptions to shipping done nan Strait of Hormuz,” said Warren Patterson, caput of commodities strategy astatine ING.

According to nan expert, almost a 3rd of world seaborne lipid passes done this checkpoint and immoderate worldly threat to that way sends an contiguous awesome to power markets.

Patterson indicated that successful nan arena of a important disruption to flows done nan Strait of Hormuz, lipid prices could surge to $120 per barrel.

On Tuesday, President Donald Trump convened a high-stakes gathering pinch his nationalist information squad wrong nan White House Situation Room to talk nan anticipation of US subject engagement alongside Israel successful its warfare against Iran.

Earlier that day, Trump had abruptly departed nan G7 acme successful Canada, fuelling speculation that a awesome overseas argumentation displacement was imminent.

Although nary charismatic determination has yet been announced, Iran issued a clear informing that it would target US subject bases crossed nan Middle East if Washington entered nan conflict.