Oil prices have experienced a notable decline, and global stock markets have seen a significant upswing, following reports indicating that the United States and Iran are nearing an agreement to end their conflict. Brent crude futures, which serve as the global benchmark for oil prices, fell to approximately $97 per barrel after these reports emerged. The price later saw a partial recovery, rising to over $101, after having been priced above $108 earlier in the trading day.
The positive sentiment in the markets extended to major equity indices. In London, the FTSE 100, representing the largest publicly traded companies, and Germany's Dax index both closed the trading session with gains exceeding 2%. The French Cac 40 index demonstrated even stronger performance, recording an increase of 3%. Asian stock markets also concluded the trading day on a higher note. The US S&P 500 index, a broad measure of American equities, registered an increase of more than 1% over the course of the day.
These market movements were primarily triggered by a report from Axios, which stated that the US administration believes it is on the verge of securing a concise, one-page document intended to end the ongoing war and pave the way for detailed nuclear negotiations. The report cited two US officials and two other sources familiar with the matter.
Hours after the Axios report, an Iranian foreign ministry spokesperson conveyed to the Iranian Students' News Agency that a US proposal aimed at resolving the conflict with Iran was still under consideration. However, subsequent statements from President Donald Trump introduced a note of caution regarding the progress. Mr. Trump suggested via his Truth Social platform that any agreement with Iran might be premature, characterizing it as a "big assumption." He also issued a warning that a failure to reach a deal could lead to bombardments "at a much higher level and intensity" than those witnessed during Operation Epic Fury.
Despite the recent fluctuations, oil prices remain significantly higher compared to the approximately $70 per barrel level observed before the commencement of the US-Israel conflict with Iran. The hostilities have substantially disrupted oil production and transportation within the region. A central point of contention has been Iran's threat to target oil ships traversing the Strait of Hormuz, a critical maritime chokepoint located south of the country. This threat was reportedly made in retaliation for US-Israeli strikes that were initiated on February 28.
Approximately one-fifth of the world's oil and gas shipments typically pass through the Strait of Hormuz. The waterway has been effectively rendered impassable for several weeks due to the escalating tensions and related security concerns. Consequently, global natural gas prices have also experienced a substantial surge since the conflict began, adding to existing economic pressures.
While major European stock exchanges have experienced declines since the end of February, the US S&P 500 has managed to climb by over 1%. In Asia, key markets broadly advanced on Wednesday. South Korea's Kospi index closed up by 6.45%, Hong Kong's Hang Seng finished 1.22% higher, and Japan's Nikkei recorded a gain of 0.38%. The Hang Seng index has seen a decline since the conflict's inception, while the Kospi and Nikkei have registered gains.
An earlier ceasefire agreement, reached between the US and Iran on April 8, had initially led to a slump in oil prices and a jump in stock markets. However, tensions resurfaced when US President Donald Trump announced on Sunday that the US military would escort ships through the Strait of Hormuz under an initiative he dubbed "Project Freedom." This announcement was followed by an increase in attacks within the strait, attributed to both Iran and the US.
Subsequently, Mr. Trump stated on social media on Tuesday that the operation would be paused "for a short period of time to see whether or not the Agreement can be finalized and signed." He further indicated that "Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran." Despite this expressed optimism, Mr. Trump affirmed that the US would maintain its blockade on ships traveling to and from Iranian ports, a measure intended to exert economic pressure on Iran.
On Wednesday, the Axios report detailed that the US believes it is nearing a one-page memorandum of understanding to end the war. According to the report, this proposed agreement would formally declare an end to hostilities and initiate a 30-day period for negotiations. These negotiations would focus on key issues such as reopening the Strait of Hormuz, limiting Iran's nuclear program, and lifting US sanctions.
Sources suggest that this represents the closest the two nations have come to an agreement since the conflict escalated. The US is reportedly awaiting Iran's response on several key points within the next 48 hours. US Secretary of State Marco Rubio also informed reporters on Tuesday that the initial US-Israeli offensive in Iran had concluded, as Washington's objectives had been met. "We would prefer the path of peace. What the president would prefer is a deal," Rubio stated, though Iran had not yet responded to these remarks.
Iranian parliamentary speaker Mohammad Ghalibaf commented earlier, stating, "We know well that the continuation of the status quo is intolerable for America, while we are just getting started." The initiative known as Project Freedom, which Mr. Trump had described as a measure to facilitate energy flow through the channel, had tested the existing ceasefire. The US reported striking several Iranian "fast boats" in the channel, while the United Arab Emirates accused Iran of attacking one of its oil ports, an allegation Tehran has denied.
