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Oil prices continued to move lower on Wednesday after dropping below $80 a barrel a day earlier, as investors grew more optimistic about a potential reopening of the Strait of Hormuz, while the global stock rally fueled by the U.S.-Iran deal showed signs of cooling.
Brent crude, the international benchmark, fell 1% to $78.1 per barrel by 6:50 a.m. GMT. U.S. benchmark West Texas Intermediate (WTI) also lost 1%, trading at $75.1 per barrel.
The decline came as expectations of easing sanctions on Iranian oil added to hopes that crude shipments through the strategically important Strait of Hormuz could return to normal levels.
While global markets initially welcomed reports of a U.S.-Iran agreement, the broader rally showed signs of slowing as investors waited for more details about the deal.
In Asia, Japan's Nikkei 225 index closed 0.7% higher at 69,902.25, while South Korea's KOSPI advanced 1.6% to a record close of 8,864.24. Hong Kong's Hang Seng lost 0.8%, while China's Shanghai Composite rose 0.4%.
European markets were largely flat after opening, with Germany's DAX 30 slipping 0.4%, while Britain's FTSE 100, Spain's IBEX 35, France's CAC 40 and the pan-European Stoxx Europe 600 index remained little changed.
Türkiye's BIST 100 opened 0.6% higher, and futures linked to major U.S. stock indexes also pointed upward.
Gold held steady at $4,330 per ounce, near its level at the beginning of the year, while silver gained 0.3% to $70.3. Among other precious metals, palladium fell 0.3% to $1,330 per ounce and platinum dropped 1% to $1,780.
Cryptocurrency markets weakened as total market capitalization fell 1% to $2.3 trillion, Bitcoin lost 1% to $65,600 and Ethereum gained 1% to $1,790.
Despite reports that the U.S.-Iran agreement could be signed on Friday, investors remained cautious as key details of the arrangement have yet to emerge.
Investors welcomed expectations that oil could flow more freely through the Strait of Hormuz, but uncertainty remains over how durable those developments may prove.
Attention is also turning to the U.S. Federal Reserve, which is due to announce its latest interest-rate decision at the first policy meeting chaired by new Fed Chair Kevin Warsh.
Markets are widely pricing in an unchanged interest-rate decision, with the federal funds rate expected to remain within the 3.5%-3.75% range, particularly after U.S. inflation accelerated to 4.2% in May.
Beyond the rate decision itself, investors are closely watching Warsh's first policy guidance for clues about the Fed's outlook in the months ahead.
Elsewhere, major central banks also remain focused on inflation risks. The European Central Bank raised interest rates by 25 basis points last week, its first increase since 2023, as policymakers sought to contain energy-driven price pressures despite easing prices.
In Japan, the Bank of Japan this week lifted its policy rate to 1%, the highest level in 31 years, citing persistent inflation concerns and signaling that additional rate increases remain possible if price pressures continue.
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