Oil prices are climbing once again as developments in the Middle East dictate market sentiment. Investors remain cautious after Iran stated it is reviewing a 15-point U.S. ceasefire proposal, while simultaneously insisting that no formal talks are underway.
U.S. President Donald Trump remarked that Iran was "desperate to make a deal," whereas Iranian Foreign Minister Abbas Araqchi asserted there has been "no dialogue or negotiations" with the United States, although various messages have been exchanged through intermediaries.
This mix of signals has left traders in a holding pattern. Meanwhile, the Strait of Hormuz remains effectively closed to most traffic, and crude prices are advancing again, though they remain well below last week's peaks.
Against this backdrop, the market's relief rally—fueled by ceasefire expectations following Trump's comments regarding negotiations with Tehran—is beginning to falter.
"The situation remains complex; it seems clear that both sides have reasons to desire an end to the conflict. However, while they seek a negotiated solution on one hand, they are preparing military strike strategies on the other, and today's negotiating tactics are extreme," Renta 4 analysts noted in their morning report.
The escalation of the conflict has rattled global markets this month, sending oil prices soaring, reigniting inflation fears, and shifting global interest rate expectations.
At 0805 GMT on Thursday, Spain's benchmark IBEX 35 was down 85.20 points, or 0.44%, at 17,094.60 points, while the pan-European FTSE Eurofirst 300 index retreated 0.67%.
In the banking sector, Santander shed 0.76%, BBVA fell 0.46%, Caixabank eased 0.43%, Sabadell dropped 0.58%, Bankinter slipped 0.22%, and Unicaja Banco lost 1.48%.
Among non-financial heavyweights, Telefónica gained 0.38%, Inditex shed 0.52%, Iberdrola fell 0.26%, Cellnex dropped 0.95%, and oil major Repsol rose 1.02%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
