European Markets Slide Amid Rising Oil Prices and Middle East Tensions

European markets took a hit on Tuesday as rising oil prices fueled inflation concerns and renewed fears over energy supplies amidst escalating tensions in the Middle East.

The pan-European STOXX 600 fell 0.2% to 648.41 points by 0705 GMT, while Germany's DAX declined 0.3%, and France's CAC 40 slipped 0.4%. London's FTSE 100 remained broadly flat after a relatively subdued session on Monday due to the U.S. public holiday.

Oil prices surged sharply, with Brent crude futures trading around $98.50 a barrel, following Iran's threat to retaliate against any further attacks by targeting energy infrastructure across the Gulf, including U.S. oil and gas interests.

The increase in energy costs has rekindled concerns that a prolonged conflict could intensify inflationary pressures, potentially complicating the outlook for interest-rate cuts by major central banks.