Monday's slump in Brent Crude sent London's oil majors sharply lower, yet the FTSE 100 still closed higher, a vivid demonstration of how oil works as a lever on the index in both directions.

A $12 drop in a single session

Brent crude had a dramatic Monday. The international benchmark fell to $105.09 a barrel at the London close, down from $117.61 on Friday, a drop of roughly $12.52. One US close report put Brent's settlement at $104.77, down 7.63%, while West Texas Intermediate settled 7.36% lower at $96.46, its biggest daily fall since 27 July.

The trigger was diplomacy. Reports suggested Washington and Tehran were considering renewed indirect negotiations, while Iran–Qatar talks raised hopes of an end to the US–Iran conflict. Iran was also reported to have offered to reopen the Strait of Hormuz under strict conditions. Iranian Foreign Ministry spokesman Esmaeil Baghaei said "the ball is now in the US's court".

The background remains tense, however. Iran's Revolutionary Guards said 11 tankers they described as violating navigational rules had caught fire in the Strait of Hormuz since 25 October.

For the FTSE 100, which counts some of the world's biggest oil companies among its members, a move of that size in crude is never just a commodities story.

The direct hit: energy stocks

The most obvious effect came through oil producers. The FTSE 350 energy sector fell 3.3% on Monday, and the FTSE 100's three biggest fallers were all oil-linked.

  • Ithaca Energy (LSE:ITH) dropped 5.94%, the steepest fall in the index. It joined the FTSE 100 alongside easyJet in September's review, effective from 21 September.
  • BP (LSE:BP.) slid 4.37%. The company also completed the $6bn sale of a 65% stake in Castrol to Stonepeak Partners, retaining 35% subject to a two-year lock-up. Former Shell chief executive Ben van Beurden has been appointed chair of the lubricants maker's new board.
  • Shell (LSE:SHEL) fell 2.86%. Its quarterly Dividend of 39.06 US cents goes ex-dividend on 12 November, with payment on 21 December.

Because the FTSE 100 is weighted by market capitalisation, heavyweights such as Shell and BP move the index more than its smaller members. When both slide together, they create a significant drag at index level. The principle is straightforward: the bigger the oil majors are relative to the rest of the index, the more Brent's swings feed through to the headline number.

Illustration: suppose, hypothetically, that energy stocks made up 15% of an index. If they fell 3.3% and everything else stayed flat, the index would drop by about 0.5% (0.15 × 3.3% = 0.495%). To offset that entirely, the remaining 85% of the index would need to rise by roughly 0.58%. The 15% figure is invented purely to show how the lever works.

The indirect lift: everyone who buys fuel

Here is the twist. The FTSE 100 did not fall on Monday. It closed at 10,761.33, up 31.55 points or 0.3%, its fourth straight gain. At midday, it had been essentially flat at 10,724.58, before recovering through the afternoon.

The reason was the other side of the oil lever. Lower crude is a cost saving for companies that consume fuel, and reports tied the broad rally in consumer, travel and construction stocks to the fall in oil, with cheaper oil seen supporting consumer-facing firms through lower transport costs.

The FTSE 350 travel and leisure sector rose 2.7%, construction and materials gained 2.8%, and consumer goods and services climbed 2.5%. International Consolidated Airlines Group (LSE:IAG) rose 3.8%. JD Sports Fashion (LSE:JD.) topped the FTSE 100 risers with a gain of 4.76%, and Kingfisher (LSE:KGF) added 4.21%, though no company-specific news was reported for either move.

IAG shows why fuel matters so much. In its second quarter of 2026, its fuel costs rose nearly 25%, and the group set full-year fuel bill guidance of up to €8.6bn, down from €9bn, while expecting to recover about 60% of the higher fuel cost. It reports Q3 results on Friday 6 November.

Not every faller fits the oil story neatly. Vodafone Group (LSE:VOD) fell 1.89% and Centrica (LSE:CNA) lost 1.83%, and no specific reason was reported for either decline. That is a useful caution against reading every move on a big oil day as a direct reaction to crude. Some shares simply drift with the wider market, regardless of what Brent is doing.

Gold provided another offset. Bullion rose to $3,968.02 an ounce from $3,898.22, and Fresnillo (LSE:FRES) gained 4.56%.

In other words, the oil lever does not only pull the FTSE 100 down when crude falls. It shifts weight from one part of the index to another. Monday's result depended on whether gains among fuel users outweighed losses among producers, and this time they did.

The lever also reaches beyond share prices. Oil feeds into inflation, and Inflation feeds into interest rates. The Bank of England announces its decision on Thursday 5 November, with Bank Rate at 3.75% and a rise to 4% widely expected, priced at about 95%. A sustained fall in crude could eventually ease some price pressure, though one session's move is unlikely to change the Bank's immediate thinking.

Key dates to watch

  • Thursday 5 November: Bank of England rate decision
  • Friday 6 November: IAG Q3 results, with 2026 dividend guidance due
  • Friday 6 November: US October payrolls
  • Thursday 12 November: Shell ex-dividend date (39.06 US cents)
  • Monday 21 December: Shell dividend payment

The bottom line

Brent is one of the most powerful single influences on the FTSE 100, because the index combines heavyweight oil producers with a broad range of fuel-hungry businesses. On Monday, a near-$12.50 fall in crude battered BP, Shell and Ithaca, yet airlines, retailers and builders gained enough to lift the index overall. The next pull on the lever depends largely on whether US–Iran diplomacy makes progress. Investors will be watching the oil price as closely as any company update this week.