Oil prices moved higher on Monday while major stock markets across Europe and Asia fell, after fresh warnings from US President Donald Trump heightened concerns over the ongoing conflict with Iran and its effect on global energy supplies.

Brent crude futures for July delivery climbed 1.81 percent to $111.27 per barrel in early trading, while US West Texas Intermediate crude for June rose 2.15 percent to $107.69 a barrel. Investors reacted cautiously after Trump issued a new message to Tehran on his Truth Social platform late Sunday.

“For Iran, the clock is ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” Trump wrote, adding to fears that tensions in the Middle East could intensify further.

The latest developments come after months of fighting following US and Israeli strikes on Iran earlier this year. Diplomatic efforts to secure a ceasefire have shown little progress, while attacks near critical infrastructure sites in the Gulf have added to uncertainty in global energy markets.

A weekend drone strike near the UAE’s Barakah nuclear power plant deepened investor concerns about the possibility of a wider regional conflict. Although UAE authorities said the plant remained operational and there was no radiation leak, the incident raised alarms over the vulnerability of energy and infrastructure facilities in the Gulf.

Asian stock markets reacted sharply to the growing uncertainty. Japan’s Nikkei 225 index dropped 0.9 percent to 60,843.09, led lower by technology shares after reaching record intraday highs last week. Bond markets in Japan also drew attention as the yield on the 10-year government bond rose to 2.8 percent, its highest level since the late 1990s, reflecting expectations of higher inflation and further interest rate increases by the Bank of Japan.

South Korea’s Kospi index recovered from early losses to gain 0.9 percent at 7,558.50, though investors remained cautious after recent rallies fueled by artificial intelligence-related stocks. Hong Kong’s Hang Seng index fell 1.6 percent, while China’s Shanghai Composite edged 0.1 percent lower after weaker-than-expected retail sales data for April.

Australia’s S&P/ASX 200 declined 1.4 percent, Taiwan’s Taiex lost 1.1 percent and India’s Sensex slipped 0.6 percent.

On Wall Street, US stock futures were largely flat after Friday’s sell-off, which ended a record-setting rally in American equities. Technology companies tied to the artificial intelligence boom led the decline. The S&P 500 fell 1.2 percent from its record high, while the Nasdaq Composite dropped 1.5 percent.

Chipmaker NVIDIA fell 4.4 percent, while Micron Technology dropped 6.6 percent as investors took profits after months of rapid gains in AI-related stocks.

Analysts said rising oil prices, geopolitical uncertainty and concerns about overstretched valuations were weighing on investor sentiment across global markets.

Germany’s struggling automotive industry is increasingly drawing attention from the country’s fast-growing defence sector, as manufacturers and defence firms explore new partnerships, factory conversions and recruitment opportunities amid economic pressures facing Europe’s carmakers.

The latest indication came from Mercedes-Benz Chief Executive Ola Källenius, who said the luxury automaker would be open to supporting Europe’s expanding defence efforts if needed.

Speaking in an interview with The Wall Street Journal, Källenius said Europe’s changing security environment was forcing companies to rethink their role in industrial production.

“The world has become more unpredictable, and I think it is quite clear that Europe needs to strengthen its defence capabilities,” he said, adding that Mercedes-Benz would be prepared to contribute if it could play a positive role.

Källenius stressed, however, that any future defence-related activities would remain limited compared with the company’s main automotive business. He did not outline any specific projects or investment plans.

Mercedes-Benz is not alone in examining possible links to the defence industry. Volkswagen is also studying whether military transport vehicles could eventually be produced at its plant in Osnabrück, according to Chief Executive Oliver Blume.

Blume said the company would make a decision later this year but emphasized that Volkswagen had no plans to manufacture weapons or tanks.

At the same time, Germany’s major defence companies are increasingly targeting the country’s automotive sector as a source of industrial capacity and skilled labour.

Rheinmetall said it is assessing whether some automotive supplier facilities in Berlin and Neuss could be converted into defence production sites. The company is also reportedly examining the possibility of taking over entire factories from car manufacturers facing financial pressure, including Volkswagen’s Osnabrück plant.

Rheinmetall Chief Executive Armin Papperger has cautioned that adapting car factories for defence manufacturing would be costly and technically challenging, though he said such options should still be considered before building new facilities from scratch.

Other defence firms are already benefiting from the downturn in the automotive industry. Hensoldt has stepped up recruitment efforts aimed at workers from automotive suppliers including Continental AG and Bosch.

Germany’s auto sector has faced mounting difficulties in recent years due to high production costs, weak European demand, growing competition from Chinese manufacturers and continuing trade tensions with the United States.

Mercedes-Benz reported that profits fell about 49 percent in 2025, dropping from €10.4 billion to €5.3 billion, while revenue declined roughly nine percent.

Most major German carmakers, with the exception of BMW, have announced domestic job cuts in recent months.

Meanwhile, the defence sector continues to expand rapidly. According to the Stockholm International Peace Research Institute, the world’s 100 largest arms manufacturers recorded record revenues in 2024.

Despite the growth, analysts note that Germany’s defence industry remains far smaller than its automotive sector. Germany’s car industry generated more than €540 billion in revenue in 2024, compared with less than €30 billion combined revenue for the country’s five largest defence companies in 2023.

A fire broke out near the UAE’s Barakah Nuclear Power Plant on Sunday after what officials described as a drone strike, adding fresh strain to rising regional tensions linked to the fragile Iran ceasefire situation.

Authorities said the incident occurred on the perimeter of the nuclear facility, located in Abu Dhabi’s Al Dhafra region. According to the Abu Dhabi Media Office, an electrical generator outside the main operational area caught fire following the strike.

Officials confirmed there were no injuries and no radiation leak. The statement added that the nuclear plant continued operating normally despite the incident.

The International Atomic Energy Agency also confirmed that the fire affected an electrical generator connected to the facility. The agency said one of the plant’s reactors temporarily relied on emergency diesel generators before normal systems were restored.

The Barakah facility is the Arab world’s first commercial nuclear power plant and plays a major role in the UAE’s long-term energy strategy. The site has been viewed as a critical piece of infrastructure for the country’s efforts to diversify energy supplies and reduce dependence on hydrocarbons.

No organization immediately claimed responsibility for the strike, and UAE authorities did not publicly identify any party behind the attack. The incident, however, comes amid heightened tensions across the Gulf following weeks of regional instability tied to the conflict involving Iran and ongoing ceasefire negotiations with the United States.

Diplomatic efforts aimed at stabilizing the situation have shown little progress in recent days, raising concerns among regional governments and energy markets that hostilities could intensify again.

Security analysts say attacks targeting strategic infrastructure have become an increasing concern across the Gulf as regional conflicts spill beyond traditional battle zones. Energy facilities, shipping routes and critical utilities have all faced elevated security threats during recent months.

The incident near Barakah also triggered renewed debate over the vulnerability of nuclear and energy infrastructure to drone warfare, which has become a defining feature of modern regional conflicts.

Meanwhile, Iranian state media continued broadcasting wartime-themed programming on Sunday, including footage showing television presenters undergoing firearms training and appearing armed during broadcasts. The images circulated widely online and added to the tense atmosphere surrounding the stalled ceasefire efforts.

The UAE has repeatedly called for regional stability and diplomatic solutions to ongoing conflicts while strengthening security coordination with international partners.

Barakah’s operators have not announced any disruption to electricity production, and authorities stressed that safety systems at the facility functioned as designed during the incident.

The nuclear plant supplies a significant share of the UAE’s electricity needs and is considered one of the country’s most strategically important infrastructure projects.