Global oil prices fell on Tuesday while equity markets recorded gains as investors reacted to renewed hopes of a possible peace deal between the United States and Iran that could ease tensions in the Middle East and reopen the Strait of Hormuz.

Brent crude and U.S. West Texas Intermediate both slipped after days of volatility driven by conflicting reports over the ceasefire and negotiations surrounding the ongoing conflict. Market sentiment improved slightly on expectations that diplomatic talks may resume, although uncertainty remains over Iran’s participation.

The White House said Vice President JD Vance is prepared to return for further discussions aimed at securing a lasting agreement, even as both sides continue to trade accusations over violations of the fragile truce.

Iran, however, maintained that it has not confirmed attendance at the proposed talks, accusing Washington of escalating tensions through maritime restrictions and other actions affecting trade routes.

The Strait of Hormuz, a critical passage for global oil shipments, has remained a key flashpoint in the conflict, with disruptions in recent weeks contributing to sharp swings in crude prices.

Despite the uncertainty, global stock markets advanced, supported by investor optimism that diplomatic progress could reduce geopolitical risk and stabilise energy supply chains.

Asian markets led the gains, with South Korea’s Kospi hitting a fresh record high driven by a renewed tech rally. Tokyo, Hong Kong, and other major markets also closed higher, while European indices posted modest gains. Wall Street, however, ended the previous session slightly lower.

Analysts said markets were reacting to shifting headlines around the ceasefire deadline, noting that while rhetoric remains tense, investors are positioning for a possible de-escalation rather than renewed conflict.

Japanese defence-related stocks also rose after reports of a policy shift easing restrictions on arms exports, adding further momentum to Asian equity markets.

Crude oil prices remain sensitive to developments in the negotiations, with traders closely watching any signs of agreement that could reopen key shipping routes and stabilise supply.