Oil Prices Surge, European Stocks Slide as Hopes for Iran Peace Deal Fade

ERBIL (Kurdistan24) – Global markets reacted cautiously on Thursday as fading hopes for a peace agreement between the United States and Iran pushed oil prices higher, weakened European stocks, and strengthened the U.S. dollar amid growing concerns over the economic impact of the Middle East conflict.

Speaking on Wednesday, U.S. President Donald Trump described ongoing negotiations with Tehran as being “on the borderline” between reaching a deal and renewed military strikes, fueling uncertainty among investors.

Iranian media reported that Pakistan’s army chief was expected in Tehran on Thursday as Islamabad continued mediation efforts while Iranian officials reviewed a new U.S. proposal aimed at ending the war.

“Markets pulled back across Europe as the waiting game to end the Iran war rumbled on,” said Dan Coatsworth, head of markets at AJ Bell.

Oil prices climbed amid fears of prolonged regional instability, while major European stock indexes declined as investors weighed the potential impact of higher energy costs and geopolitical tensions on economic growth.

The European Union warned Thursday that growth across the eurozone would be weaker than previously forecast this year, while inflation was expected to remain significantly higher due to the conflict and resulting energy shock.

Fresh economic data added to concerns over the region’s outlook. The eurozone purchasing managers’ index (PMI), published by S&P Global, fell to 47.5 in May from 48.8 in April, marking a 31-month low and signaling continued economic contraction.

A PMI reading below 50 indicates declining business activity.

Despite the uncertainty in Europe, Asian markets posted strong gains driven by optimism in the technology sector. Shares in Nvidia surged after the chipmaker reported record quarterly revenue of $81.6 billion, exceeding Wall Street expectations amid strong demand for artificial intelligence hardware.

Investor sentiment was also boosted after Elon Musk filed for a public sale of shares in SpaceX, a move that could become one of the largest initial public offerings in history.

South Korea’s Kospi index jumped 8.4 percent, supported by gains in Samsung Electronics shares after labor unions paused an 18-day strike affecting operations. Japan’s Nikkei index also closed 3.1 percent higher.