FTSE 100 Drops Amid Hormuz Tensions Despite Strong UK Retail Sales
The FTSE 100 fell by 1.45% to close at 10,659.13 on September 18, marking its worst session since July. The decline was driven primarily by rising geopolitical tensions in the Strait of Hormuz following an attack on a tanker and reduced crude oil allocations from Saudi Aramco (TADAWUL:2222). These developments overshadowed stronger-than-expected UK retail sales data for August. The incident in the Strait, where Iran's Revolutionary Guard claimed responsibility after striking a vessel allegedly operating without authorization, raised concerns about energy supply disruptions and inflation. Meanwhile, Saudi Aramco reportedly cut crude allocations to European refiners following an attack on its East-West pipeline. Although oil prices initially rose, they later declined as traders assessed alternative routes. Despite the positive retail sales report—showing a 0.5% increase in August compared with expectations of a decline—the market remained bearish due to fears that inflation could rise above 4% by early 2027 and that interest rates may remain high or even climb further.
Topics: European markets FTSE 100 oil supply disruption Strait of Hormuz attack