Oil prices have risen sharply and European stock markets have fallen, after the US seizure of an Iranian vessel hit hopes for a peace deal.<\/p>\n
Brent crude, the international benchmark for oil prices, rose by as much as 5% on Monday to $95.50 (\u00a370.75) a barrel.<\/p>\n
European stock markets dropped, with the UK\u2019s blue-chip FTSE 100 index down 0.5%. The French Cac 40 and the German Dax both fell by about 1%. The Stoxx Europe 600 index, which tracks the biggest companies on the continent, was down 0.9%.<\/p>\n
It followed Donald Trump\u2019s announcement on Sunday that an Iranian cargo ship had been seized after trying to get past the US-enforced blockade<\/a> near the strait of Hormuz shipping channel.<\/p>\n He wrote on social media: \u201cWe have full custody of their ship, and are seeing what\u2019s on board!\u201d<\/p>\n The incident raised the possibility that the ceasefire could fail before negotiators reconvened in Pakistan<\/a>.<\/p>\n The Iran war, which is now entering its eighth week, has killed thousands of people and has rocked the global energy market. Normally about one-fifth of the world\u2019s oil and gas passes through the strait of Hormuz.<\/p>\n Airline stocks also fell sharply on Monday amid fears over the impact on international travel and jet fuel shortages<\/a>. IAG, the owner of British Airways, dropped 3.4%, while Wizz Air fell 4.9%. Ryanair, Europe\u2019s biggest airline, fell 3.3%. Rolls-Royce, which manufacturers engines for aircraft, also fell by about 3%.<\/p>\n The energy companies BP and Shell were among the biggest risers on the FTSE 100 on Monday, with shares in both up more than 2%.<\/p>\n Oil prices had slumped 9% on Friday, after Iran said it would reopen the strait of Hormuz during the agreed two-week ceasefire period, and Trump said Tehran had agreed to never close the key shipping channel again.<\/p>\n However, over the weekend there were reports that the Iran\u2019s Revolutionary Guards had fired upon commercial vessels.<\/p>\n Tehran has also said it will not participate in a second round of negotiations that the US had hoped to start before the ceasefire expires on Wednesday.<\/p>\n Susannah Streeter, the chief investment strategist at the broker Wealth Club, said hopes for the resumption of trade, especially energy shipments, had \u201cevaporated\u201d, causing \u201cfresh jitters\u201d in the stock market.<\/p>\n \u201cDeep reserves of patience are needed, but with some industries such as airlines staring at jet fuel shortages, these are tense times,\u201d she said.<\/p>\n Fears continue to grow around the scale of the energy shock in the UK, where wholesale gas market prices rose by 5.8% to 102p a therm on Monday.<\/p>\n Analysts at the Energy and Climate Intelligence Unit have estimated that a sustained oil price of $100 a barrel would mean UK motorists who drive 8,000 miles a year could face an increase in annual fuel costs of \u00a3140.<\/a><\/p>\n The British Oil Security Syndicate, an industry trade organisation, told the Sun there had been a 19% increase in drive-offs and failures to pay at UK forecourts since the start of the US-Israel war on Iran<\/a>.<\/p>\n