BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks look set to drift lower at open on Monday as Middle East tensions escalated over the weekend and the Strait of Hormuz remained closed, leading to a rebound in crude oil prices.
Iran has rejected participation in a second round of peace talks under U.S. pressure, insisting on Hormuz rights amid ceasefire violations and disputed U.S. claims.
Tehran accused Washington of playing a 'blame game' and violating international law after American forces seized an Iranian-flagged cargo ship.
'You cannot keep violating the international law, double down on your blockade, threaten Iran with further war crimes, insist on unreasonable demands, pace out with rhetoric and pretend to be pursuing diplomacy,' Reza Amiri Moghadam, Iran's Ambassador to Pakistan, wrote in a post on X.
Iran's state sponsored broadcaster, Islamic Republic News Agency (IRNA), also said that American's excessive demands, unrealistic expectations and the naval blockade of Iranian ports have so far hindered progress in the negotiations.
Iran has launched drone attacks on U.S. military ships following the seizure of an Iranian vessel near the Strait of Hormuz.
U.S. President Donald Trump has threatened to bomb Iran's power plants and bridges unless Iran accepts his terms.
In addition to West Asia tensions, a raft of quarterly earnings may also influence trading sentiment as the week progresses.
Several big-name U.S. companies, including 3M, UnitedHealth, AT&T, Boeing, IBM, Tesla, American Express and Intel are due to report their results this week.
Kevin Warsh, President Trump's pick to lead the Federal Reserve, is scheduled to testify before the powerful Senate Banking Committee on Tuesday.
Asian markets were mostly higher in cautious trade while U.S. equity futures fell following a renewed flare-up in U.S.-Iran tensions.
Earlier today, the People's Bank of China kept the loan prime rate unchanged for an 11th straight month in April.
The dollar rebounded against major peers, sending gold prices down about 1 percent below $4,800 an ounce.
Brent crude prices surged more than 5 percent to above $95 a barrel as shipping stalled in the Strait of Hormuz.
U.S. stocks rose sharply on Friday, racing to another record as crude oil prices plummeted by more than 10 percent to levels seen in the early days of the Iran war amid easing geopolitical tensions.
The S&P 500 gained 1.2 percent to close above 7,100 for the first time after Iran said the Strait of Hormuz is open again for commercial traffic on the heels of the 10-day ceasefire between Israel and Lebanon.
However, President Trump said the U.S. will continue its blockade of Iranian ports until a final peace agreement is reached.
The Dow rallied 1.8 percent to reach its best closing level in almost two months and the tech-heavy Nasdaq Composite advanced 1.5 percent.
European stocks closed on a buoyant note on Friday amid easing concerns about inflation and growth.
The pan European Stoxx 600 soared 1.6 percent. The German DAX surged 2.3 percent, France's CAC 40 climbed 2 percent and the U.K.'s FTSE 100 added 0.7 percent.
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