Oil prices edged lower on Tuesday while most global stock markets moved higher, as investors pinned cautious hopes on a possible deal between the United States and Iran to ease tensions and reopen the Strait of Hormuz.
Market sentiment remained sensitive ahead of the expiry of a two-week ceasefire.
According to officials, the White House signalled that Vice President JD Vance was prepared to return to Pakistan for another round of talks aimed at ending the conflict, which has driven oil prices higher and raised inflation concerns.
However, uncertainty persisted as Iran said it had not yet decided whether to participate in the negotiations. Tehran also accused Washington of violating the truce through a naval blockade and the seizure of a vessel.
Oil prices have fluctuated sharply in recent days. Crude fell last week after Iran indicated it would allow ships to pass through the Strait of Hormuz, a key route for nearly one-fifth of global oil supplies. Prices rebounded on Monday after Tehran again restricted access, citing the ongoing blockade.
US President Donald Trump has also accused Iran of breaching the ceasefire, warning that the blockade would remain in place until an agreement is reached. He indicated that extending the truce was unlikely if no progress was made.
Iranian officials, meanwhile, rejected what they described as pressure tactics. Parliament Speaker Mohammad Bagher Ghalibaf said negotiations would not take place under threats, adding that the country was prepared for further escalation if required.
Despite the tensions, investors remained cautiously optimistic that both sides could eventually reach an agreement. US benchmark crude, West Texas Intermediate, and Brent crude all recorded gains during the session.
In equity markets, Asian indices mostly advanced, led by gains in Seoul as a technology sector rally resumed. Markets in Tokyo, Taipei, Hong Kong, Singapore, and Manila also moved higher, while Shanghai and Sydney showed mixed performance.
Analysts said markets were reacting to the possibility of progress rather than certainty, with the approaching ceasefire deadline adding urgency to developments.
Separately, shares of Japanese defence-related companies rose after Tokyo announced plans to ease long-standing restrictions on arms exports. The move is expected to support both national defence objectives and economic growth.
