European Shares Slide as Oil Prices Surge Amid Middle East Tensions

European shares declined on Tuesday as oil prices and bond yields surged due to escalating Middle East tensions. The pan-European STOXX 600 index fell 0.5% to 652.94 points, marking a fifth consecutive session of losses.

The rise in crude oil prices to around $90 a barrel was particularly concerning for Europe, which relies heavily on energy imports. Brent crude climbed 0.3%, with natural gas prices increasing by 0.8% to $2.7 amid fears that renewed US-Iran tensions could disrupt energy supplies.

Higher oil prices are likely to drive up fuel costs and inflation in Europe, weighing on consumer spending and businesses' operating expenses. The market is also focused on whether Europe can replenish its gas storage at reasonable prices ahead of winter.

The euro zone's long-dated bond yields hit multi-year highs due to concerns about a prolonged Middle East conflict driving up energy prices and increasing defence-related borrowing. Germany's 10-year Bund yield reached its highest since 2011, while France's 10-year yield hit a 16-year peak.