Oil Prices Slide, Stocks Surge on Reports of US-Iran Deal
BBC Business reported Wednesday that oil prices dropped sharply and global equities climbed after sources indicated the US and Iran may be close to a US-Iran deal to end their ongoing conflict.
Brent crude futures fell as low as $97 a barrel on the news. That followed an intraday high above $108. The benchmark had been trading near $70 before the war began in late February.
Markets React Sharply to Peace Signals
European bourses moved higher across the board midday Wednesday. London’s FTSE 100 and Germany’s DAX each gained more than 2%. France’s CAC 40 added 3%. Asian markets had already closed in positive territory, with South Korea’s KOSPI leading gains at over 6%. Hong Kong’s Hang Seng and Japan’s Nikkei also finished higher, though by smaller margins.
US equity markets have fared better than European peers since the war began. The S&P 500 is above its late-February level, while major European indexes remain underwater from that point.
What the Reported Deal Would Cover
The potential agreement, as described by Axios, would take the form of a one-page memorandum of understanding. It would formally declare an end to hostilities and open a 30-day window for more detailed negotiations. Those talks would cover reopening the Strait of Hormuz, placing limits on Iran’s nuclear programme, and lifting US economic sanctions on Tehran. The US is reportedly waiting on Iranian responses to several outstanding points within the next 48 hours.
US Secretary of State Marco Rubio told reporters Tuesday that the initial US-Israeli offensive had concluded, saying Washington’s objectives had been met. He said the administration preferred a negotiated outcome.
Background: A Conflict That Has Rattled Energy Markets
The war began with US-Israeli strikes on Iran on 28 February. Iran responded by threatening to target oil tankers using the Strait of Hormuz, a narrow waterway through which roughly one-fifth of global oil and gas shipments normally pass. The strait has been largely closed for weeks, sending energy prices sharply higher and grounding supply chains.
An earlier ceasefire on 8 April briefly calmed markets before unravelling. President Donald Trump announced “Project Freedom” on Sunday, a military operation to escort ships through the strait. Two days later he paused the plan, citing progress toward a final agreement. Iran’s parliamentary speaker said Tehran was “just getting started,” and the country has not formally responded to Rubio’s overture.
Analysts warn that until a signed agreement is in place, oil markets will remain volatile and sensitive to any fresh escalation along the strait.
Read Next: Trump Pauses Hormuz Operation as Iran Deal Talks Intensify
