European stocks jump 2% as sliding oil prices buoy sentiment

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Galaxy Globe bulk carrier and Luojiashan tanker sit anchored in Muscat, as Iran vows to close the Strait of Hormuz, amid the U.S.-Israeli conflict with Iran, in Muscat, Oman, March 9, 2026.

Benoit Tessier | Reuters

LONDON — European stocks opened notably higher on Tuesday, as traders watched developments in the Middle East and reduced but still elevated oil prices.

The pan-European Stoxx 600 ended the session 1.8% higher, with most sectors in positive territory. The Stoxx Europe Oil and Gas index recovered from earlier losses in the day to finish about 0.3% higher.

The rebound meant the regional benchmark snapped a three-day losing streak and set it on course to claw back some of last week’s near-6% loss as global sentiment was shaken by the U.S.-Iran war.

Airline stocks staged a broad recovery on Tuesday as the falling oil price eased concerns over jet fuel. Lufthansa and Air France were recouping Monday’s losses, rising 7.8% and 5.1% respectively.

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Global sentiment also improved, with Asia-Pacific and U.S. markets rising. The S&P 500 was last seen 0.35% higher.

Those moves came as oil prices pared gains after U.S. President Donald Trump told a CBS News reporter that “the war is very complete, pretty much,” but also signaled a readiness to act to keep the vital oil passage, the Strait of Hormuz, open.

Trump said he was considering seizing control of the strait, saying Iran would be hit harder if it did anything to stop oil flows through the strategic sea passage.

Oil prices plunged as much as 10% overnight after Trump’s comments, but remain elevated: Brent crude was down around 10.6% at $88.50 per barrel as of 4:40 p.m. London time (12:40 p.m. ET) on Tuesday. U.S. crude oil was also down almost 11% at $84.39 per barrel. The declines come after oil surged past $100 on Monday.

A spokesperson for Iran’s Ministry of Foreign Affairs told CNBC on Monday that oil tankers transiting the Strait of Hormuz “must be very careful.”

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Oil tankers transiting Strait of Hormuz “must be very careful,” Iran Foreign Ministry warns

Access Middle East

Energy ministers from the Group of Seven nations — Canada, France, Germany, Italy, Japan, the U.K. and the U.S. — were set to meet virtually Tuesday to discuss a potential release of strategic oil reserves.

It comes after G7 finance ministers discussed the situation on Monday. In a statement, International Energy Agency Executive Director Fatih Birol — who attended the meeting — said the conflict in the Middle East was “creating significant and growing risks for the market,” but said various options, including freeing up IEA emergency oil stocks, had been discussed.

Amin Nasser, CEO of Saudi oil giant Aramco, told an earnings call on Tuesday that the Iran war will have “catastrophic consequences for the world’s oil market.”

AJ Bell investment director Russ Mould said in a note Tuesday morning that the overnight developments were “unlikely to be the last word in the current crisis.”

“All eyes are likely to be on the G7 and whether it will release emergency stockpiles of oil to help calm the markets further,” he said.

VW shares up 3%

In corporate news, German autos giant Volkswagen reported a 53% year-on-year drop in operating profit when it published its full-year earnings update on Tuesday morning. The company attributed the decline to Trump’s tariff regime, as well as currency fluctuations and costs associated with adjusting its Porsche product strategy.

“The last year was really challenging indeed,” Arno Antlitz, Volkswagen’s chief operating officer and chief financial officer, told CNBC’s Annette Weisbach on Tuesday.

“But in this challenging year, we took some important steps to increase the resilience of the Volkswagen Group,” he added, pointing to the rollout of 30 new vehicle models, restructuring the company and achieving a cash flow of more than 6 billion euros ($7 billion) , which meant liquidity was stable. The company’s shares advanced more than 3%.

Elsewhere, Swiss chocolatier Lindt reported full-year sales of 5.9 billion euros on Tuesday, representing organic sales growth of 12.4% from the previous year.

Operating profit was reported at a stronger-than-expected 971 million euros, with Lindt touting its progress despite “a challenging market environment” that included volatile cocoa prices, geopolitical tensions and the Trump administration’s tariffs.

Shares of Lindt were last seen trading 10.1% lower.

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