European markets opened Monday with clear sector splits as investors reacted to an announcement that the United States and Iran had reached a preliminary agreement to halt their conflict and reopen the Strait of Hormuz. Oil benchmarks dropped to three-month lows and energy equities led the declines, while luxury and travel-related stocks moved higher.
By 08:31 GMT, Brent crude had fallen 4.5% to $83.41 a barrel and U.S. West Texas Intermediate was down 5.5% at $80.28. Both futures contracts recorded their weakest levels since March 10, extending losses of more than 3% from Friday's close.
European energy groups were among the heaviest decliners on the session. Equinor, TotalEnergies, Eni, BP, Shell, Neste and Repsol registered falls in a range between roughly 3.5% and 6%, reflecting the move lower in crude prices.
In contrast, shares tied to luxury goods and travel experienced gains. LVMH rose about 2.4%, while Herms, Ferrari, Dior, Kering and Brunello Cucinelli advanced in the roughly 2% to 4% range. Airline and travel operators also benefited, with Lufthansa, TUI, IAG, Accor and easyJet adding between about 1.7% and 6.1% as markets priced in potentially steadier fuel costs and improved travel conditions.
The reported diplomatic progress that underpinned the market moves included statements from U.S. and regional officials. President Trump said on Sunday that the Strait of Hormuz - a vital maritime route for global oil and gas shipments that had been effectively closed by Iran for months - would reopen without tolls and that a U.S. naval blockade of Iranian ports would be lifted.
Further details on the timetable and process for formalising the arrangement were provided by officials involved in mediation. Pakistani Prime Minister Shehbaz Sharif said a memorandum of understanding is scheduled to be signed in Switzerland on Friday; Pakistan served as a mediator in the discussions.
Iranian outlets and officials outlined elements of the draft accord. The semi-official Mehr news agency reported that the draft calls for the strait to reopen within 30 days under Iranian arrangements. Iran's deputy foreign minister, Kazem Gharibabadi, said a broader agreement would be negotiated during a 60-day ceasefire period.
Market participants weighed the immediate effects of the diplomatic development on commodity prices and sector performance. Oil's slide exerted downward pressure on upstream and integrated energy stocks, while easing fuel-related cost concerns supported select consumer-facing and travel names.
Trading in individual stocks reflected those dynamics, with a mix of double-digit and single-digit percentage moves within sectors. The market reaction highlighted how geopolitical developments tied to shipping lanes and regional security can rapidly shift valuations across energy, luxury goods and travel operators.