European stock markets have received a timely shot in the arm, with rising energy and metal prices fuelling a rally that has lifted investor sentiment and bolstered the continent’s heavyweight commodity players.
Leading indices across the eurozone closed the week firmly in positive territory, as strong gains in the energy and basic materials sectors helped offset lingering concerns over sluggish growth and political instability. The pan-European STOXX 600 climbed to its highest level in over two months, with London’s FTSE 100 leading the charge amid a surge in oil and mining stocks.
Driving the upturn is a potent combination of seasonal demand, tightening global supply chains, and a fresh round of geopolitical jitters that has sent commodity prices soaring. Brent crude rose above $90 a barrel for the first time this year, while key industrial metals such as copper, aluminium and nickel also posted sharp gains, buoyed by renewed demand from Asia and persistent supply constraints.
For the continent’s energy giants, the rebound has been swift and substantial. Shares in BP, Shell and TotalEnergies all climbed by more than 5% over the past week, as investors piled into fossil fuel-linked assets on expectations of strong quarterly earnings. Analysts at UBS said the companies were “well-positioned to capitalise on the current pricing environment,” and noted that further upside was possible if colder-than-expected weather persists into late spring.
The catalyst, in part, has been an unseasonably harsh winter gripping much of northern and eastern Europe. Heating demand has remained elevated well into April, prompting utilities to draw more heavily on both gas and oil reserves. With storage levels already under strain following last year’s turbulent energy markets, the resulting spike in prices has translated directly into improved margins for producers.
At the same time, a series of geopolitical flare-ups—not least escalating tensions in the Middle East and renewed supply chain disruptions in the Red Sea—have prompted fears of further bottlenecks. Traders have responded by hoarding contracts and driving up futures prices, fuelling the rally in underlying commodities.
“Energy markets are once again at the mercy of geopolitics,” said Anya Lorenz, chief European strategist at Berenberg Bank. “What we’re seeing is a classic risk premium building into prices—one that benefits producers in the short term, even as it raises concerns for inflation and industrial output.”
The windfall for energy firms has extended to the mining and metals sector, where companies such as Glencore, Rio Tinto, and Anglo American have also seen their valuations climb. Copper, often viewed as a bellwether for global industrial activity, hit a 14-month high on the London Metal Exchange, amid mounting optimism over a pickup in Chinese construction activity.
While European economies remain largely flat in terms of GDP growth, the performance of the commodity sector has provided a welcome source of strength for major indices, particularly in the UK and Nordic markets, where such firms hold significant index weightings.
However, the rally has reignited the debate over Europe’s energy transition strategy. Critics argue that surging fossil fuel profits underscore the region’s continuing dependence on hydrocarbons, despite public commitments to a net-zero agenda. Green campaigners have called on governments to impose windfall taxes on the latest round of profits, warning that failure to do so would undermine public support for climate policy.
“Europe cannot keep riding the fossil fuel rollercoaster,” said a spokesperson for Greenpeace EU. “Yes, these firms are profitable again—but at what long-term cost to energy security and environmental stability?”
In response, industry leaders have defended their performance as essential to energy system resilience. A spokesperson for Shell said the company remained “fully committed to the energy transition” but added that “continued investment in reliable oil and gas supplies remains necessary to prevent market shocks and ensure affordability.”
For now, investors appear undeterred. Market participants are increasingly shifting their portfolios towards so-called “old economy” sectors, such as energy and materials, at the expense of more speculative technology and growth assets.
As spring unfolds, all eyes will be on how long the current commodity surge can be sustained. Analysts caution that warmer weather, easing supply chain constraints, or a diplomatic resolution to current global tensions could bring prices back down.
But in a region still adjusting to economic uncertainty, fiscal pressure, and political volatility, the commodity complex has offered a rare silver lining.
“Commodities are doing the heavy lifting for European markets,” said Daniel Frey of J.P. Morgan Asset Management. “It’s not the kind of rally you necessarily want in the long run—but for now, it’s exactly what the markets needed.”
