European Markets Decline as Tensions Rise Over Strait of Hormuz

Leonardo leads gains on Milan's MIB index as investors monitor geopolitical developments and corporate earnings season

Apr. 13, 2026 at 7:51am

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An extreme close-up of intricate, interlocking metal gears and mechanisms in shades of steel grey, bronze, and chrome, conceptually representing the physical infrastructure and security of the global financial system.As tensions over the Strait of Hormuz escalate, the heavy, tangible machinery that powers the global financial system remains a steadfast symbol of economic security and stability.NYC Today

European markets opened the week on a defensive note following the announcement of a possible blockade of the Strait of Hormuz by the US, although overall movements remained contained. Investor attention is divided between the start of the first-quarter earnings season and geopolitical developments, with talks between the US and Iran closing without an agreement. In Milan, Leonardo led the gains on the MIB index, while Eni rose on concerns over the potential energy crisis.

Why it matters

The tensions over the Strait of Hormuz represent a significant geopolitical development that could have far-reaching implications for global energy markets and the broader economy. Investors are closely monitoring the situation and its potential impact on corporate earnings and market performance.

The details

On Monday, European markets began the week on a defensive footing following the announcement of a possible blockade of the Strait of Hormuz by the US, although movements remained contained overall. Investor attention is divided between the start of the first-quarter earnings season and geopolitical developments. Talks between the US and Iran, which lasted over 20 hours in Pakistan, closed without an agreement, with disagreements over Hormuz and the Iranian nuclear program. In response, Donald Trump announced his intention to block the Strait, also threatening actions against vessels linked to Tehran. As a result, oil prices have returned above $100 per barrel, and the dollar is strengthening, while equity markets are down.

  • On Friday, March inflation in the US rose by 0.9% month-on-month, bringing the annual figure to 3.3%, driven almost entirely by energy, while the core component remained contained at 0.2% monthly.
  • On Monday, the Bundesbank's monthly report is expected in Germany, while in the US, the International Monetary Fund summits are on the agenda.

The players

Donald Trump

The former US president who announced his intention to block the Strait of Hormuz and threaten actions against vessels linked to Iran.

Claudio Descalzi

The CEO of Eni, who stated that the conflict in Iran and the closure of the Strait of Hormuz represent "the most important event of the last 40 years," opening the door to extraordinary measures to manage an unprecedented energy crisis.

Luigi Lovaglio

The former CEO of Banca Monte dei Paschi di Siena, who was dismissed for cause and is now nominated by the PLT Energia group to return as CEO.

Pierluigi Tortora

The leader of the PLT Energia group, which has nominated Luigi Lovaglio as CEO of Banca Monte dei Paschi di Siena.

Michael Brown

An analyst at Pepperstone who explained that the market interprets the US moves regarding the Strait of Hormuz as a negotiating lever rather than a structural change.

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What they’re saying

“The conflict in Iran and the closure of the Strait of Hormuz represent 'the most important event of the last 40 years,' opening the door to extraordinary measures to manage an unprecedented energy crisis.”

— Claudio Descalzi, CEO of Eni

What’s next

The key issue for Banco BPM's upcoming shareholders' meeting on April 16 is the bank's 3.7% stake in Banca Monte dei Paschi di Siena, which it acquired through market purchases and the acquisition of Anima. Banco BPM's board will decide on April 14 whether to abstain or support the outgoing board's list.

The takeaway

The tensions over the Strait of Hormuz and the potential for an energy crisis have become a significant factor for investors to monitor, as it could impact corporate earnings and market performance. The situation also highlights the ongoing geopolitical uncertainties that continue to shape the global economic landscape.