LONDON, March 23, 2026, 22:43 GMT
European exchange-traded funds, or ETFs, saw outflows spread on Monday as investors cut exposure to bonds and financial stocks on fears the war with Iran will keep energy prices elevated. Morningstar Direct data cited by ETF Stream showed Europe-domiciled products had seen withdrawals by March 18 of $675 million from Europe fixed-income ETFs and $3.2 billion from financial-sector ETFs. That happened even as markets rebounded late after U.S. President Donald Trump postponed threatened U.S. strikes on Iranian power plants for five days. 1
That matters because higher fuel costs are already feeding into households and interest-rate expectations in Europe, raising the risk of slower growth and faster inflation. Euro zone consumer confidence fell to -16.3 in March from -12.3, and Capital Economics’ Andrew Kenningham said “household spending will decline and cause GDP to stagnate over the next two quarters.” 2
The tone in markets has hardened. Reuters reported investors were moving toward cash while cutting bonds and bets on tech and mining, and RBC Capital Markets’ Karen Jorritsma said “Cash balances are going up” as investors made a “fairly quick exit to the door.” 3
Monday’s price action was still violent. Brent settled down 10.9% at $99.94 a barrel, London’s FTSE 100 finished just 0.2% lower after earlier falling 2.4%, and BP and Shell dropped 2.2% and 4.2% as crude gave back part of its war premium. 4
The physical market remains tight. Reuters reported European and U.S. gasoline cargoes are heading to Asia as buyers scramble around Gulf disruptions, pushing Asian gasoline margins to about $37 a barrel over Brent, while IEA Executive Director Fatih Birol said further stock releases were being discussed and warned that “A stock release will help to comfort the markets, but this is not the solution.” 5
Energy executives are sounding much the same note. TotalEnergies CEO Patrick Pouyanne said a disruption lasting more than three or four months would pose a “systemic risk” to the global economy, and Shell integrated gas chief Cedric Cremers said the conflict could “send the wrong signals” about the long-term affordability and security of gas supplies. 6
The retreat is visible in broader fund data too. Global equity funds lost $20.3 billion in the week to March 18, their biggest selloff in three months, European funds shed $2.13 billion and money market funds drew $32.57 billion as investors kept thicker cash buffers, Reuters data showed. 7
But the rebound may not hold. Iran denied any talks with the United States after Trump’s announcement, and U.S. crude futures were back up $1.37 in early Asia trade by 2206 GMT. 8
Goldman Sachs on Sunday raised its March-April Brent average forecast to $110 a barrel and said a prolonged Strait of Hormuz disruption could send prices past the 2008 peak. Wealth Club’s Susannah Streeter warned that “Clinging to President Trump’s words is fraught with risks,” while Swissquote’s Ipek Ozkardeskaya said “Hope is here, but uncertainties persist.” 9
