Oil Drops, Stocks Rally on Iran Deal Reports
BBC Business reported Wednesday that oil prices retreated sharply and global stock markets advanced after emerging reports suggested the United States and Iran may be approaching a US-Iran deal to end their ongoing military conflict.
Brent crude, the international oil benchmark, slid from above $108 a barrel earlier in the session to a low near $97 before recovering to just above $101. The moves reflected how quickly sentiment can swing when geopolitical headlines shift.
Markets React Across Three Continents
European equities closed firmly higher. London’s FTSE 100 and Germany’s DAX each gained more than 2%, while France’s CAC 40 climbed roughly 3%. Across Asia, South Korea’s KOSPI surged more than 6%, Hong Kong’s Hang Seng added around 1.2%, and Japan’s Nikkei ended modestly higher. In the United States, the S&P 500 was up approximately 1% in early afternoon trading.
The catalyst was a report from Axios, citing two US officials and additional briefed sources, 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 begin a 30-day negotiating window covering the Strait of Hormuz, Iran’s nuclear programme, and US sanctions relief.
Iran’s foreign ministry indicated the US proposal remained under consideration. President Donald Trump, however, tempered expectations, posting on Truth Social that any Iranian agreement was “a big assumption” and warning that a failure to reach terms would trigger strikes at a significantly higher intensity.
Background: A Conflict That Upended Energy Markets
The US-Israel military campaign against Iran began in late February, sending oil prices surging from roughly $70 a barrel as regional production and shipping routes buckled. The Strait of Hormuz, through which approximately one-fifth of global oil and gas normally flows, has been effectively closed for weeks. Global gas prices have similarly spiked throughout the conflict.
An earlier ceasefire on 8 April briefly calmed markets before tensions reignited. Trump subsequently launched “Project Freedom,” a US military escorting initiative through the strait, which drew renewed attacks from both sides. He then announced a short pause in the operation to allow negotiations to progress, while maintaining a blockade of ships bound to and from Iranian ports.
Secretary of State Marco Rubio told reporters Tuesday that initial offensive operations had achieved their objectives and that Washington preferred a diplomatic path forward.
48-Hour Window Now in Focus
Negotiators are reportedly awaiting Tehran’s response to several outstanding points within 48 hours. Iran’s parliamentary speaker signalled his country was not under pressure to concede, saying the status quo was far more tolerable for Iran than for the US.
Markets will watch closely for any formal signal from either government as the narrow window for a framework agreement opens.
Read Next: Trump’s Tariff Pause Sends Markets Soaring in Historic Single-Day Rally
