The FTSE 100 advanced 0.1% on Tuesday, outperforming European peers as energy majors defied escalating tensions in the Strait of Hormuz. The index’s gains were led by BP and Shell, which rose 2.2% and 1.5% respectively, while Centrica added 1.2%. The moves came as Brent crude futures climbed 0.52% to $91.35 a barrel and West Texas Intermediate gained 0.78% to $84.39.
Sterling held steady at $1.3543 against the dollar, while gold prices fell. December gold futures slipped 0.56% to $4,448.26, and spot gold declined 0.57% to $4,391.37.
UK labor market data released on Tuesday showed further softening in the jobs market. The unemployment rate rose to 4.9% in the three months to June, up from 4.8% previously, while the single-month rate jumped to 5.4% from 4.6%. PAYE employment fell by 13,000 in July, extending a decline that has left total employment 0.3% lower than a year earlier. Job vacancies dipped to 707,000 from 711,000. Regular pay growth held at 3.5%, with public-sector wages accelerating to 6.1% while private-sector growth slowed to 2.8%.
Geopolitical risks in the Strait of Hormuz intensified after U.S. President Donald Trump published a map on Truth Social labeling parts of the waterway—including Iranian, Omani, and Emirati territory—as "NEW U.S. Territory." In a Fox News interview, Trump said Iran should "put up the white flag of surrender" and warned Oman of military retaliation if it interfered with U.S. positions. He also declined to say whether Washington would extend a maritime memorandum of understanding.
Iran’s parliament speaker, Mohammad Bagher Ghalibaf, reiterated that Tehran would maintain its de facto blockade of the strait until the U.S. lifts its naval blockade of Iranian ports, unfreezes assets, and removes oil sanctions. A senior Iranian official told Reuters that Tehran would adopt a "fully offensive" military posture and launch a "timely and precise" attack to break the blockade if diplomacy failed.
Shipping data from Kpler showed continued disruption in the strait. On Monday, just six commodity ships transited the waterway, well below the 10-day average of 11, and no very large crude carriers or LNG tankers passed through.
Jefferies strategist Mohit Kumar warned clients that the conflict offers "no easy way out," expects sustained upward pressure on oil prices, and favors curve steepeners over long-duration rates exposure. He highlighted the upcoming Jackson Hole symposium on August 28 as a key risk event for rates positioning.
