LONDON — Global financial markets reacted with rising stock prices and falling oil benchmarks on Thursday as investors assessed the impact of a fragile U.S.-Iran ceasefire agreement that could allow increased Iranian crude exports.
Oil prices declined amid expectations that the deal, which extends a ceasefire and potentially eases restrictions on shipping through the Strait of Hormuz, would boost global supply. Brent crude futures fell around 3% earlier in the week to near $78 a barrel, while West Texas Intermediate dropped about 2%, according to market data.
The movements followed announcements of a framework agreement between the United States and Iran to extend the ceasefire for 60 days and authorize limited Iranian crude sales, officials said. U.S. authorities temporarily lifted some sanctions, enabling Iran to increase exports through August, the U.S. Treasury Department indicated.
Equity markets in Europe and Asia posted gains as lower energy costs supported broader sentiment. Shares in energy-importing regions and consumer sectors advanced, while some oil producers faced pressure, traders reported.
The ceasefire builds on an initial April agreement mediated by Pakistan that halted major hostilities in the U.S.-Iran conflict. Recent extensions have included provisions related to the Strait of Hormuz, a critical chokepoint for global oil shipments that had seen disruptions.
"Optimism over talks between the United States and Iran sent oil prices retreating," a New York Times report noted on recent developments.
However, concerns persist about the durability of the truce. U.S. Vice President JD Vance warned against actions that could undermine the agreement, and sporadic tensions have continued despite the framework. Details on full implementation and long-term production ramp-up remain unclear, analysts said.
Energy experts indicated that any normalization of fuel prices could take months, as global inventories recover. Oil had surged earlier in the year amid the conflict, reaching elevated levels before retreating on de-escalation hopes.
Broader market indexes showed mixed but generally positive responses, with some reversal of prior geopolitical risk premiums. No major disruptions were reported in trading sessions following the latest updates.
As of Thursday, oil prices stabilized after initial declines, with Brent around recent lows and global stocks holding modest gains, according to ongoing market reports. Further negotiations are expected in coming weeks.
