The disagreement leaves an already fragile ceasefire in limbo and pushes back the prospect of normalizing crude oil flows in the Middle East.
As a result, Brent futures L6N40W09V surged 7.3% to 102 dollars per barrel -- representing a price increase of more than 40% since the war disrupted navigation through this key artery of global energy trade -- sharply reviving inflationary fears.
Investors are beginning to price in the possibility that central banks such as the ECB or the Bank of England could be forced to tighten monetary policy, a radical shift from the expectations of rate cuts held by the market prior to the conflict.
Nevertheless, some analysts maintain a degree of moderate optimism. Bankinter notes that the truce remains in place until April 22 and that the blockade on Iranian crude "could accelerate its reopening (referring to the Strait of Hormuz), by forcing Iran to reach an agreement through economic strangulation."
"In conclusion, as we have been saying, the peace process will not be without tensions, such as those we will see today, but we continue to believe that the conflict represents a 'blow', but not a reversal of the economic cycle," they added in their morning note.
According to The Wall Street Journal, the White House has not ruled out limited strikes against Iran, although no offensives had been reported in the hours leading up to the European market open.
Trump himself admitted L1N40V05E on Sunday that energy prices could remain elevated ahead of the November midterm elections, a rare acknowledgment of the potential political impact of the conflict.
After rising 3.7% last week following the US-Iran ceasefire, at 0702 GMT on Monday, the Spanish benchmark IBEX 35 was down 198.10 points, or 1.09%, at 18,006.20 points, while the FTSE Eurofirst 300 index of leading European shares retreated 0.75%.
In the banking sector, Santander lost 2.05%, BBVA fell 1.50%, Caixabank shed 1.27%, Sabadell dropped 1.25%, Bankinter gave up 1.07%, and Unicaja Banco lost 1.38%.
Among large-cap non-financial stocks, Telefonica retreated 0.13%, Inditex shed 1.30%, Iberdrola gave up 0.44%, Cellnex fell 0.50%, and oil major Repsol rose 2.50%.
(Reporting by Tomas Cobos; editing by Benjamin Mejias Valencia)
