Oil prices climbed in early trading on Wednesday after Iran reportedly attacked two vessels in the Strait of Hormuz, using new tactics to target shipping, Reuters reported.
Elsewhere, the escalating conflict between the Houthis and Saudi Arabia posed a further risk to crude supplies.
Saudi Arabia said on Wednesday that an attack on an Aramco building in the kingdom's east sparked a "limited fire" and that debris from intercepted Houthi missiles wounded four people in the capital Riyadh.
International benchmark Brent crude futures rose around 1% spiking above $107 a barrel early on Wednesday morning in Europe, while US West Texas Intermediate crude futures also gained 0.5% to $94.64 a barrel.
Supply concerns also pushed European gas prices to a four-year high. Benchmark Dutch TTF gas futures traded just above €86 per megawatt-hour on Wednesday morning, slightly below the previous peak of €87.44.
In equity trading, Europe opened higher as the Euro Stoxx 50 rose 0.3% while the broader pan-European Stoxx 600 traded 0.2% higher.
The UK's FTSE 100, France's CAC 40, Germany's DAX, Italy’s FTSE MIB, Spain's IBEX 35 and the Netherlands' AEX all traded between 0.1% and 0.6% higher.
France's CAC 40 and Spain's IBEX 35 led the gains rising 0.5% and 0.6% respectively.
Asian shares were mixed, as interest in chipmakers and artificial intelligence continued to support some stocks.
Japan's benchmark Nikkei 225 gained 0.5%, as did Hong Kong's Hang Seng. The Shanghai Composite fell 0.3%. Australia's S&P/ASX 200 declined 0.6%. South Korea’s Kospi lost 1%.
RelatedWall Street indices finished little changed near their records on Tuesday. The first big batch of third-quarter earnings reports from US companies beat analysts' expectations, but the resulting share price gains and losses largely cancelled each other out.
The S&P 500 edged down by less than 0.1%, pulling slightly further from its all-time high set last week. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq Composite dipped 0.2%.
Goldman Sachs jumped more than 4% at the start of trading after the bank reported a July-to-September profit that far exceeded analysts' expectations. But its stock quickly erased those gains, moving between gains and losses before finishing 0.2% lower.
Expectations are high for profits across US companies. Analysts are forecasting overall year-on-year earnings growth of nearly 30% for companies in the S&P 500 in the third quarter, according to FactSet.
Companies need to meet those expectations to justify record share prices, despite concerns about high inflation, increased pressure from the bond market and the conflicts in the Middle East.
Investors have also been concerned that chip stocks may have risen too far amid the enthusiasm for AI.
China's memory chipmaker CXMT, which is making advances that could challenge industry heavyweights, rose about 1.0% in early Wednesday trading in Asia. In South Korea, Samsung Electronics shares also rose, but SK Hynix fell.
In the bond market, US Treasury yields eased on Tuesday after oil prices fell. The yield on the 10-year Treasury slipped to 5.21% from 5.24% late Friday. Trading in the US bond market was closed on Monday for a holiday.
In currency trading, the US dollar traded at ¥158.30, while the euro was at $1.1209.
