Brent rose above $100 as restricted traffic through the Strait of Hormuz tightened supply and underscored a fragile regional truce. With only limited tankers moving, refiners face higher costs, shipping insurance is climbing, and governments are considering releases from strategic reserves.

An Israeli operation in Lebanon, which targeted an armed group, has put a fragile ceasefire at risk. Tehran briefly halted traffic through a key strait, while Washington and Tehran readied talks. Markets firmed on hopes of diplomacy, though energy prices remained high.

Hedge funds are increasing shorts on European stocks amid heightened geopolitical tensions and energy risks. Positions concentrate on low-cost airlines and other rate-sensitive shares. The UK, with deep liquidity and exposure to utilities and housing, is seen as an easier trade.

A Gulf state vowed severe reprisals as a deadline from a rival power to reopen the Strait of Hormuz nears. Both sides dismissed proposed de-escalation. The standoff threatens shipping and global oil supplies, raising the risk of higher prices and market volatility.