Markets were rattled after Iran attempted a "surprise attack" on US forces, pushing oil prices higher and dampening hopes of a swift de-escalation in the Persian Gulf. Analysts at ING warned that with Saudi oil infrastructure increasingly targeted, the risk of prolonged supply disruption is growing, while chip stocks fell further as a wider sell-off in AI-related shares continued. This adds to pressure on companies exposed to volatile energy costs and on European gas supplies heading into winter.

Reports suggest Saudi Arabia's 400,000 barrel-a-day Jazan refinery has shut following Houthi attacks over the weekend, while tanker traffic through the Strait of Hormuz remains largely halted after Iran rejected an Omani proposal to share oversight of shipping routes. QatarEnergy has reportedly extended force majeure for Asian and European buyers to the end of September, and EU LNG imports look set to fall over 25% year-on-year in July, leaving gas storage at 56% full versus a 72% seasonal average. Amid this, consumer goods group Reckitt Benckiser reported second-quarter like-for-like sales growth of 4.2%, ahead of forecasts, though operating profit fell 14.3% to £1.47bn, and it said it now expects a smaller-than-feared hit from oil costs as prices have moderated somewhat.