Oil shares are rising across Europe, with Eni and Tenaris performing particularly well in Milan

 (Il Sole 24 Ore Radiocor) - The surge in oil prices, which shows no sign of abating, is driving up European oil and gas shares. On a flat day for the main European stock markets, the Stoxx Europe 600 Oil & Gas sub-index posted one of the best sectoral gains (up by over 1.2 per cent). Consequently, in Milan, shares in Eni and Tenaris and Saipem, which is also benefiting from rumours that the Saudi-Kuwaiti joint venture Kjo – as reported by Intermonte, citing Upstream – has selected the consortium formed by Italian group and the Indian firm Larsen & Toubro as preferred contractor for Package 2B of the Dorra offshore project in Kuwait. The package includes the central gathering platform, export pipelines and cables. Turning to the stock markets, in Paris Totalenergies is the top performer on the main index with gains of over 1.5 percentage points; in London, BP is shining and Shell is performing well, both with gains of over 1 per cent. Repsol is seeing similar gains in Madrid, whilst Equinor is standing out in Oslo.

The stalemate in the Strait of Hormuz is driving up oil prices: yesterday, the US President, Donald Trump, stated that Iran should pay compensation for those killed in wars, attacks and protests, in response to Tehran’s demands for compensation and an end to sanctions. Also yesterday, Iran had stated that it was close to a final agreement with Oman to establish new shipping routes through the Strait, whilst reiterating, however, that the United States must meet certain conditions – including the payment of compensation – before the strategic waterway for energy transport is reopened.

“An agreement to reopen the Strait of Hormuz remains an elusive goal,” say analysts at Anz. “The Strait of Hormuz remains severely restricted, with shipping traffic showing no significant recovery,” the experts add. “We have returned to a situation where there is no war underway, but the Strait of Hormuz remains closed,” say analysts at Jefferies. “The longer the Strait remains closed, the more stocks will dwindle and the greater the impact on oil prices will be,” the analysts continue. The October Brent contract is, in fact, approaching the $90 per barrel mark last seen 10 days ago, whilst WTI has returned to levels seen at the end of July, edging closer to $84 per barrel.