Global markets surged and oil prices eased on Wednesday amid reports that the United States and Iran are nearing a deal to end the ongoing conflict.
Brent crude, the global oil benchmark, fell sharply to around $97 per barrel before rebounding above $101, after trading above $108 earlier in the day.
Equity markets responded positively, with Europe’s FTSE 100 and DAX closing more than 2 per cent higher, while France’s CAC 40 jumped about 3 per cent. In the US, the S&P 500 gained around 1 per cent in early trade, while Asian markets also ended broadly higher.
The rally follows reports that Washington is close to finalising a preliminary agreement with Tehran that could end hostilities and pave the way for negotiations on Iran’s nuclear programme and sanctions relief.
However, Donald Trump struck a cautious note, saying any agreement remains uncertain and warning that failure to reach a deal could lead to intensified military action.
The conflict has centred around tensions in the Strait of Hormuz, through which nearly a fifth of global oil and gas shipments pass. The waterway has remained largely disrupted in recent weeks, pushing energy prices higher.
