Oil Slides, Stocks Surge on Reports of US-Iran Peace Deal
BBC Business reported Wednesday that oil prices fell sharply and global equities rallied after reports emerged that the US and Iran are nearing an agreement to end their ongoing conflict.
Brent crude futures dropped below $100 a barrel following the reports. That marked a steep retreat from above $108 earlier the same morning. Prices remain well above the roughly $70 per barrel recorded before hostilities began in late February.
Markets React With Cautious Optimism
European indices led the charge higher. London’s FTSE 100 climbed more than 2%, while Germany’s DAX and France’s CAC 40 each rose close to 3%. The US S&P 500 gained just under 1% and was expected to open sharply higher later in the session.
Asian markets had already closed higher earlier Wednesday. South Korea’s KOSPI surged 6.45%, Hong Kong’s Hang Seng added 1.22%, and Japan’s Nikkei rose 0.38%.
Market participants remained cautious, however. Analysts noted the gains reflected hope rather than certainty, with no deal formally signed as yet.
What the Reported Agreement Would Cover
Axios reported that Washington believes it is approaching a one-page memorandum of understanding. The document would formally declare an end to hostilities and begin a 30-day negotiating window. Those talks would cover reopening the Strait of Hormuz, curbing Iran’s nuclear programme, and lifting American sanctions.
The US is said to be awaiting Iran’s response on several key outstanding points within 48 hours.
US Secretary of State Marco Rubio told reporters Tuesday that the initial US-Israeli offensive had concluded, its objectives met. He signalled Washington’s strong preference for a diplomatic outcome. Iran’s parliamentary speaker Mohammad Ghalibaf offered a starkly different tone, suggesting Tehran is prepared to sustain the standoff.
Background: A Conflict That Disrupted Global Energy
The US-Israel military campaign against Iran began on 28 February. Iran’s subsequent threat to block oil tankers through the Strait of Hormuz, a waterway handling roughly one-fifth of global oil and gas shipments, effectively closed the route for weeks. Both oil and gas prices soared as a result.
An earlier ceasefire on 8 April briefly calmed markets before tensions reignited. President Donald Trump’s so-called “Project Freedom” operation to escort vessels through the strait escalated confrontations again. Trump paused the operation Tuesday on social media, citing meaningful progress toward a final agreement.
European stocks extended gains through Wednesday afternoon as the reports circulated, reinforcing investor hopes that the worst of the energy shock may be nearing an end.
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