London-listed energy majors Shell and BP were among the standout gainers on the FTSE 100 on Tuesday, as crude oil prices pushed higher for a third consecutive session, driven by receding hopes for a diplomatic resolution to the Middle East conflict.
Shell shares rose 1.3%, while BP climbed 2.8%, bucking a broader weak session for UK equities in which the FTSE 100 slipped for a seventh straight day and the FTSE 250 fell 0.4%, dragged down by declines in mining and financial stocks.
The rally in energy shares tracked a sharp move in oil markets, with prices climbing back above $90 a barrel. Traders grew increasingly doubtful that a ceasefire agreement between the United States and Iran would materialise, after Iran signalled it would adopt a more “offensive stance” and Washington ruled out extending an existing truce.
The escalating rhetoric revived concerns over potential disruption to energy supplies from the region, a key driver of crude pricing in recent sessions.
The move higher in oil comes against a backdrop of rising global bond yields — with long-term borrowing costs in the US, Japan and Germany reaching multi-decade highs — as investors weigh renewed inflation risks stemming from higher energy costs feeding through supply chains.
For UK-listed oil majors, the geopolitical premium embedded in crude prices offers a near-term earnings tailwind, even as the broader London market grapples with a cooling domestic labour market and softer risk appetite across cyclical and commodity-linked sectors elsewhere on the index.
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