Oil Retreats From $108 as Peace Hopes Lift Global Stocks
BBC Business reported Wednesday that oil prices dropped sharply and global stock markets climbed after reports that Washington and Tehran are close to a one-page agreement to end their ongoing conflict.
Brent crude, the global benchmark, tumbled from above $108 a barrel to roughly $97 before partially recovering. Even at that level, prices remain well above the $70 range that prevailed before hostilities broke out at the end of February.
Stock Markets Jump on Deal Hopes
European bourses moved higher across the board. London’s FTSE 100 and Germany’s DAX each gained more than 2% midway through Wednesday’s session. France’s CAC 40 advanced around 3%. Asian markets had already closed higher, led by South Korea’s Kospi, which surged more than 6%.
The catalyst was a report from Axios citing four sources, including two US officials, that the White House believes it is nearing a brief memorandum of understanding with Iran. The proposed document would formally end the war and open a 30-day window for deeper negotiations covering the Strait of Hormuz, Iran’s nuclear programme, and the lifting of US sanctions.
Why the Strait of Hormuz Matters
The Strait of Hormuz sits at the heart of the dispute. Roughly a fifth of the world’s oil and gas normally transits the narrow waterway, which has been effectively shut for weeks. Iran threatened to target commercial tankers crossing the strait in retaliation for US-Israeli strikes, sending global energy prices sharply higher since the conflict began.
A Fragile Ceasefire History
The two sides had previously agreed a ceasefire on 8 April, which briefly calmed markets. That truce frayed quickly. US President Donald Trump announced “Project Freedom,” a military-escorted shipping lane through the strait, which triggered fresh exchanges of fire. Trump then paused the operation on Tuesday, saying on social media that meaningful progress was being made toward a comprehensive agreement.
Secretary of State Marco Rubio told reporters Tuesday that the initial phase of US-Israeli strikes had concluded, adding that Washington preferred a negotiated outcome. Iranian parliamentary speaker Mohammad Ghalibaf struck a harder tone, suggesting Tehran was prepared to endure prolonged pressure.
The US is said to be waiting on Iran’s response to several outstanding points within a 48-hour window, leaving markets in a cautious but optimistic holding pattern.
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