Shell Share Price: shell share price falls as oil prices jump and shares fall
The shell share price has fallen as global oil and gas prices rose sharply after attacks near the Strait of Hormuz, forcing vessels to anchor and prompting warnings that the waterway could be closed. Markets reacted to Iran's strikes across the Middle East in response to ongoing attacks by the US and Israel.
Shell Share Price reaction
In London the FTSE 100 share index fell 1%, with the owner of British Airways among the biggest fallers. Banks such as Barclays, Standard Chartered and HSBC saw their share prices slide amid concerns that a sustained rise in energy prices risks fueling inflation, which in turn could lead to fewer interest rate cuts by central banks.
Oil and gas market moves
Brent crude, the global benchmark, jumped by 10% to touch more than $82 a barrel on Monday after at least three ships were attacked near the Strait of Hormuz at the weekend. Natural gas prices also surged by as much as 25%. After its initial surge, Brent crude fell back to $79 a barrel while US-traded oil was up by around 7. 6% at $72. 20. The price of gold added 2% to $5, 388 an ounce.
Strait of Hormuz disruption
Vessels have been forced to anchor as Iran warned vessels not to pass through the crucial waterway in the south of the country, through which about 20% of the world's oil and gas is shipped. International shipping has almost come to a standstill at the entrance to the Strait of Hormuz. The UK Maritime Trade Operations Centre said that two vessels had been struck, and an "unknown projectile" was reported to have "exploded in very close proximity" to a third. At least three ships were attacked near the Strait of Hormuz at the weekend.
Markets in Europe slide
Leading stock markets in Europe sustained bigger drops: in France the CAC-40 fell by 1. 8% while Germany's Dax extended earlier declines to fall by 2. 1% in early afternoon trading. The scale of energy market moves and the shipping disruption pushed wider market selling.
Analysts' warnings and quotes
"The market isn't panicking", Saul Kavonic, head of energy research at MST Marquee, said. "There is more clarity that so far, oil transport and production infrastructure hasn't been a primary target by any side, " he added. "The market will be watching for signs that traffic through the Strait of Hormuz returns, which would see oil prices subside again. " Some analysts have warned it could go over $100 in the event of a prolonged conflict, which could have a knock-on effect on inflation and interest rates.
Robin Mills, chief executive at Dubai-based consultancy Qamar Energy and a former executive at Shell, said: "The jump in prices will feed through almost immediately because the oil traders are very much following the news too. At the moment, oil prices are not particularly high, they are still below where they were even two years ago so we're not in full-blown oil crisis mode yet. "
