SINGAPORE — Global stock markets rose on Thursday as investors welcomed signs of progress toward an agreement that could restore commercial shipping through the Strait of Hormuz, easing concerns over disruptions to one of the world's most important energy transit routes while weighing lingering geopolitical risks.
European equities traded higher and U.S. stock futures pointed to a firmer Wall Street open after Iranian and Omani officials said they had reached an understanding on navigation routes through the strategic waterway, although key political and security issues remain unresolved. The prospect of more reliable maritime traffic through the strait improved investor sentiment after months of conflict that had disrupted energy shipments and heightened inflation concerns.
Market participants said expectations that oil and liquefied natural gas flows could gradually normalize supported broader risk appetite, even as traders remained cautious because any arrangement would require further political agreement and implementation.
Oil prices recovered modestly on Thursday after earlier declines, with investors balancing optimism over diplomatic progress against continuing security concerns in the region. Brent crude traded near $80 a barrel, while U.S. West Texas Intermediate also edged higher, reflecting uncertainty over how quickly shipping conditions could improve.
The Strait of Hormuz, located between Iran and Oman, normally carries about one-fifth of global oil shipments. Traffic through the passage has been disrupted for months by conflict involving the United States and Iran, prompting sharp swings in energy markets and raising concerns over global inflation and economic growth.
Officials in Tehran said an understanding had been reached with Oman on the coordinates of a navigation route, but Iranian authorities reiterated that broader conditions, including issues related to sanctions and maritime restrictions, remained unresolved. The United States has not publicly endorsed the proposed arrangement, and differences over the administration of shipping through the strait persist.
Analysts said equity investors viewed the diplomatic developments as reducing the immediate risk of prolonged supply disruptions, though they warned markets could remain volatile until a formal agreement is concluded and commercial traffic resumes on a sustained basis.
Attention is now focused on whether negotiators can translate the preliminary understanding into an operational agreement that restores confidence in shipping through the waterway while reducing the threat of further disruptions to global energy supplies.
