European stocks fell sharply after Iranian Supreme Leader Ayatollah Ali Khamenei said the Strait of Hormuz should remain closed, heightening fears of oil supply disruptions. The statement triggered fresh selling across major European indices, with energy and transportation sectors hit hardest. Investors rushed to safe-haven assets as geopolitical tensions in the Middle East escalated.

Market analysts say the Strait of Hormuz is critical for global oil flows, with roughly 20% of global oil shipments passing through the narrow waterway. Iran has previously threatened to close the strait during periods of heightened tensions with Western powers. The latest comments come amid ongoing nuclear negotiations and regional instability, adding pressure to already volatile markets.

European energy stocks bore the brunt of the selloff, with major oil companies seeing significant declines. The pan-European STOXX 600 index dropped over 1.5% in early trading, with banking and industrial shares also falling. Market volatility is expected to persist as investors assess the potential impact on global energy supplies and economic growth.