UK equities traded modestly higher on Tuesday as investors continued to evaluate the implications of the recently announced U.S.-Iran memorandum of understanding, with sentiment supported by expectations that a formal signing ceremony will take place in Geneva later this week.
By 07:14 GMT, the FTSE 100 had gained 0.25%, while Germany’s DAX rose 0.23% and France’s CAC 40 advanced 0.33%. Sterling weakened 0.10% against the U.S. dollar to trade at $1.3409.
Oil Prices Ease as Hormuz Reopening Progresses
Energy markets remained focused on developments surrounding the Strait of Hormuz, with traders continuing to factor in the gradual restoration of shipping activity through the key waterway.
Brent crude fell 0.91% to $82.41 per barrel, while WTI crude declined 0.74% to $80.15. Gold prices also moved lower, with spot gold down 0.40% at $4,326.29 per troy ounce as demand for traditional safe-haven assets softened.
Markets Monitor Next Steps in U.S.-Iran Framework
Investors remain closely focused on the U.S.-Iran agreement, which was digitally signed by President Trump and Vice President Vance ahead of a planned formal ceremony in Geneva coordinated by Switzerland, Pakistan and Qatar.
The framework links sanctions relief and Iran’s reintegration into the global economy to verified reductions in its enriched uranium stockpile, acceptance of international inspections and restrictions on support for regional militant groups.
President Trump said on Monday that commercial vessels are already moving through the Strait of Hormuz and that full clearance of the route is expected by Friday. Vice President Vance also stressed that no funds have been released under the agreement and dismissed reports suggesting otherwise.
Global Leaders Respond to Agreement
Speaking at the G7 summit in Evian, French President Macron described the agreement as “a very important step towards peace and for the global economy.”
Israeli Prime Minister Netanyahu adopted a more cautious position, reiterating that Iran would never be allowed to obtain nuclear weapons “with or without a deal.”
Meanwhile, Iran’s Foreign Ministry stated that Lebanon remains part of the broader understanding reached under the agreement, a claim that Israeli officials rejected.
UK Announces Ukraine Nuclear Fuel Support Package
At the G7 gathering, Prime Minister Starmer unveiled a £210 million package backed by UK Export Finance to support supplies of enriched uranium to Ukrainian nuclear operator Energoatom.
The agreement is intended to help power Ukraine’s nuclear facilities over the next two years and forms part of broader efforts to strengthen the country’s energy security.
The UK government is also preparing a fresh sanctions package that would increase the number of sanctioned shadow fleet and Russian LNG vessels to more than 600. Officials said Britain would be the first country to sanction several LNG vessels involved in transporting restricted Russian cargoes.
Thames Water Rescue Plan Faces Scrutiny
Back in the UK, attention remained on Thames Water after Environment Minister Emma Reynolds reportedly raised concerns with regulator Ofwat regarding the utility’s proposed £10 billion rescue package.
The creditors’ proposal is understood to have been viewed as “weak” by the government.
Thames Water, which serves around 16 million customers and carries close to £20 billion of debt, remains at risk of nationalisation if a market-based restructuring solution cannot be reached. Reynolds is expected to update Parliament on the situation later on Tuesday.
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