European equities moved higher at the start of Friday trading, while oil prices retreated, after reports indicated fresh diplomatic progress aimed at easing tensions between the United States and Iran.
By 06:53 GMT, the pan-European Stoxx 600 index had gained 0.2%. Germany’s DAX rose 0.1%, France’s CAC 40 added 0.5%, while the UK’s FTSE 100 traded broadly unchanged.
Investor sentiment improved following reports that Washington and Tehran had reached a preliminary agreement to prolong the ceasefire that has been in place for several weeks, although the proposal is still awaiting approval from U.S. President Donald Trump.
Sources cited by Reuters said the proposed arrangement would extend the truce for a further 60 days. The agreement would also allow commercial shipping to resume through the Strait of Hormuz while negotiators continue discussions on a broader settlement, including issues related to Iran’s nuclear programme.
The Strait of Hormuz has become a focal point in the conflict, given its importance to global energy markets. Roughly one-fifth of the world’s oil supply passes through the strategic waterway, and disruptions to maritime traffic in recent months have contributed to significant volatility in energy prices.
Efforts by both sides to restrict shipping activity through the route have raised concerns over supply shortages, pushing crude prices sharply higher and fuelling fears that elevated energy costs could trigger a new wave of inflation across major economies, including the United States.
Against this backdrop, oil markets reacted positively to signs of diplomatic progress. Brent crude, the international benchmark, fell 1.3% to $92.54 a barrel, retreating from recent peaks but remaining well above levels seen before the conflict began.
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