Oil Drops, Markets Rally on Reports of US-Iran War Deal
BBC Business reported Wednesday that a potential US-Iran deal is moving closer, sending oil prices sharply lower and lifting equity markets across multiple continents. Brent crude futures, the global oil benchmark, slid to around $97 per barrel before partially recovering. Earlier in the session the price had topped $108 per barrel.
Markets React Sharply to Peace Signals
European indices moved decisively higher on the news. London’s FTSE 100 and Germany’s DAX each climbed more than 2% midway through trading, while France’s CAC 40 gained roughly 3%. Asian markets had already closed in positive territory, with South Korea’s Kospi leading gains at 6.45%. Hong Kong’s Hang Seng rose 1.22% and Tokyo’s Nikkei added 0.38%.
US equities have fared better than European peers throughout the conflict. The S&P 500 sits above its late-February level, while the major European bourses remain below it.
Background: A War That Strangled Energy Markets
The conflict between the US-Israeli alliance and Iran has disrupted global energy flows since strikes began on 28 February. Iran’s threat to block the Strait of Hormuz, a narrow waterway through which roughly one-fifth of global oil and gas normally moves, effectively closed the passage for weeks. Oil prices, which hovered near $70 per barrel before the fighting started, surged well above $100. Global natural gas prices also climbed steeply.
A brief ceasefire reached on 8 April briefly steadied markets. But renewed tensions followed when President Donald Trump announced “Project Freedom,” a US military operation designed to escort vessels through the strait. The announcement drew fresh attacks from both sides. Trump subsequently paused the operation on social media Tuesday, citing progress toward a comprehensive agreement.
What a Deal Could Look Like
News outlet Axios, citing four sources including two US officials, reported that Washington believes it is close to finalising a one-page memorandum of understanding with Tehran. The document would formally declare an end to hostilities and open a 30-day window for deeper negotiations. Those talks would cover reopening the Strait of Hormuz, limiting Iran’s nuclear activities, and lifting US sanctions.
Secretary of State Marco Rubio told reporters Tuesday that the initial US-Israeli offensive had achieved its objectives. “We would prefer the path of peace,” Rubio said, adding that a negotiated deal remains the president’s preference. Iran has yet to publicly respond. US officials are reportedly awaiting Tehran’s position on several key points within the next 48 hours.
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