Negotiators are close to finalizing a 60-day extension of the U.S.-Iran ceasefire and establishing a framework for nuclear talks, according to a report by the Financial Times.
The development comes amid ongoing diplomatic efforts to de-escalate tensions in the region, which have been a source of volatility for global markets.
The potential agreement could provide a temporary reprieve for shipping through the Strait of Hormuz, a critical chokepoint for global oil exports.
Any reduction in geopolitical risk in the region typically leads to a decline in energy prices and a boost in investor confidence.
The current ceasefire, which has been in place since April 8, has seen intermittent clashes as both sides continue to assert their positions. U.S. President Donald Trump recently described the ceasefire as 'on life support' after rejecting a counter-proposal from Iran.
However, recent diplomatic progress suggests a renewed push for stability.