Oil prices have retreated sharply, slipping below the $100 per barrel threshold for the first time since tensions escalated in the region.
The decline marks a significant reversal from recent highs, with Brent crude falling to levels not seen since before the Iran conflict intensified.
This move reflects a rapid repricing of supply disruption risks as diplomatic prospects improve.
European equities are expected to open near unchanged on Thursday, buoyed by the cooling in energy costs.
The FTSE 100 faces headwinds from the oil sector's pullback, but broader market sentiment has stabilized as investors digest the shift in geopolitical dynamics.
The drop in crude prices alleviates inflationary pressures that had weighed on growth expectations across the continent.