LONDON: World oil prices dived on Wednesday and stock markets rallied on fresh hopes for an end to the Iran war.

Washington believes it is close to reaching an agreement with Iran to reopen the key Strait of Hormuz and end the conflict, US news outlet Axios reported, citing two US officials.

International oil benchmark Brent North Sea made a double-digit plunge to under $100 a barrel, before climbing back above that level after US President Donald Trump threatened to restart bombing Iran.

Brent crude futures were $7.63, or 6.94pc, lower at $102.24 a barrel by 11:51am ET (1551 GMT), having earlier dropped below $100 for the first time since April 22. US West Texas Intermediate lost $7, or 6.84pc, to $95.27. Earlier, it plunged by more than 12pc to under $90 a barrel before paring losses.

European equities got a boost, with the Paris exchange piling on gains of nearly 3pc and both Frankfurt and London ending the day up more than 2pc.

“The (Axios) news has ignited fresh optimism that we’re moving in the right direction for global energy markets, which is supporting a broad risk-on move” into equities, noted Saxo UK investor strategist Neil Wilson.

“Bond yields slipped along with the US dollar as risk sentiment picked up with a swifter end to the conflict vital to addressing the market’s inflation risk.” According to Axios, the two sides are close to agreeing on a “one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations”.

“We have been promised peace deals before, which have then failed to materialise, so while the market is willing to trade on the back of this deescalation, it will take further concrete steps to end the war and reopen the Strait of Hormuz before the oil price can meaningfully fall below $100 per barrel for Brent crude,” said Kathleen Brooks, research director at trading platform XTB.

Wall Street’s stock indices shot higher as well, with sentiment also buoyed by better-than-expected corporate earnings.

Published in Dawn, May 7th, 2026