Global oil prices have declined while equity markets climbed after reports emerged that the United States and Iran are nearing an agreement to end the ongoing war.
Brent crude, the international oil benchmark, slipped to below $100 a barrel after the news, having traded above $108 earlier in the day.
In contrast, major stock indices moved upward in early trading. London’s FTSE 100 gained more than 2%, while Germany’s Dax and France’s Cac 40 each advanced by almost 3%. In the United States, the S&P 500 posted a rise of just under 1%.
Market sentiment shifted after Axios reported that Washington is close to drafting a one-page agreement aimed at halting the conflict and paving the way for more detailed nuclear discussions.
Despite the recent decline, oil prices remain significantly higher than the roughly $70 per barrel level seen before the US-Israel confrontation with Iran, which disrupted production and shipping in the region.
A key factor in the tensions has been Iran’s repeated threats to target oil tankers passing through the Strait of Hormuz, a vital shipping route south of the country, following strikes involving US and Israeli forces since late February.
Roughly 20% of global oil and gas exports normally pass through the strait, which has been effectively disrupted for weeks. Energy markets have also been pushed higher as gas prices surged alongside the conflict.
Stock performance across regions shows mixed trends, with major European exchanges still trading below late February levels, while the S&P 500 remains above its pre-conflict position.
Asian markets also closed higher on Wednesday, with South Korea’s Kospi jumping 6.45%, Hong Kong’s Hang Seng rising 1.22%, and Japan’s Nikkei edging up 0.38%. The Hang Seng, however, remains down since the start of hostilities, unlike the other two indices.
Earlier in April, a brief ceasefire between the US and Iran triggered a sharp drop in oil prices and a rally in global equities.
Tensions later flared again after US President Donald Trump announced a naval escort initiative in the Strait of Hormuz, called “Project Freedom”, aimed at protecting shipping routes. The move was followed by increased activity in the region involving both Iranian and US forces.
Trump later said on social media that the operation would be paused temporarily to allow negotiations to progress, adding that “great progress” had been made toward a final agreement. He also confirmed that pressure on Iranian shipping routes would continue as part of efforts to push Tehran economically.
Axios further reported that US officials are working toward a short agreement that would formally end the conflict and initiate a 30-day negotiation period covering the reopening of the strait, limits on Iran’s nuclear programme, and easing of US sanctions.
Although the developments suggest progress, market reactions have remained cautious, reflecting uncertainty that a final deal has not yet been reached. Washington is still awaiting Iran’s response on key issues within 48 hours.
European markets extended gains following the reports, while US stock futures pointed to a stronger opening.
US Secretary of State Marco Rubio said earlier that the initial US-Israeli military actions in Iran had achieved their objectives, adding that Washington preferred a diplomatic resolution. “We would prefer the path of peace. What the president would prefer is a deal,” he stated.
Iran has not formally responded to Rubio’s remarks. Meanwhile, Iranian parliamentary speaker Mohammad Ghalibaf said that continued tensions would not favour the United States, stressing that “we are just getting started.”
Trump’s “Project Freedom” initiative had already strained the ceasefire, with Washington claiming strikes on Iranian fast boats in the strait, while Iran accused the United Arab Emirates of involvement in attacks on one of its oil ports allegations denied by Tehran.