European Stocks Slide on Middle East Fears and Surging Oil Prices

European equities fell Tuesday as oil prices surged due to concerns over a potential Middle East conflict. The pan-European STOXX 600 index dropped by 0.2% to 654.81 at 0703 GMT.

The rise in crude prices was led by Brent, which climbed around 0.6% to $91.41 per barrel. Energy shares also saw a significant increase of 0.6%, outperforming other sectors.

However, basic resources took the biggest hit, falling 1% due to lower gold prices. Rising Treasury yields decreased demand for the precious metal ahead of the release of minutes from the US Federal Reserve's July policy meeting.

Eurozone long-dated bond yields reached multi-year highs as investors feared a prolonged Middle East conflict could fuel inflation through higher energy prices and increased defense spending.