Main developments
Oil fell back below $100 per barrel as investors seized on possible signs of progress in efforts to end the US-Iran war and reopen the Strait of Hormuz.
Iran is reviewing a one-page US proposal aimed at bringing an end to the conflict, the terms of which include Tehran suspending its nuclear enrichment programme in exchange for sanctions against Iran being lifted.
Under the deal, presented to Iran on Wednesday, both sides would also allow transit through the vital waterway.
Brent crude fell 2 per cent to $99 per barrel in European trading on Thursday, down from a high of $109 in the previous session.
The Nikkei 225 led gains in Asia, soaring 5.6 per cent on Thursday. In Europe, the Stoxx 600 nudged 0.2 per cent lower, following a 2.2 per cent gain on Wednesday.
Futures contracts pointed to the S&P 500 edging slightly higher at the New York opening bell on Thursday.
The oil price has swung wildly this week, hitting close to $115 on Monday as US President Donald Trump announced a plan for the US to begin escorting ships through the strait. He later rowed back on the plan, citing pressure from mediators.
Trump said the war would end and the Strait of Hormuz would be “open to all” if Tehran signed up to the deal with Washington. But he warned that if Iran failed to agree, the US would resume strikes against the Islamic republic.
On Wednesday evening, Israel carried out its first air strike on Beirut since a wave of attacks on April 8, putting strain on the fragile ceasefire. An initial two-week truce between the two countries announced last month was extended by Trump on April 23 for three weeks.
Iran’s president and Supreme Leader hold two-hour meeting
Iran’s president said he had a two-hour meeting with the Islamic republic’s new Supreme Leader Ayatollah Mojtaba Khamenei, who has not been seen in public since being injured in an attack in the opening moments of the conflict, according to state media.
The US-Israeli air strikes killed Ali Khamenei, Mojtaba’s father and former supreme leader. Mojtaba has since issued only written statements, with no official account of his health condition.
In comments published on Thursday, President Masoud Pezeshkian described the new leader’s “humble and deeply intimate approach”.
“This approach turned the atmosphere of the dialogue into one based on trust, calm, solidarity and direct talks without any mediation,” Pezeshkian said.
It was unclear whether the supreme leader and Pezeshkian had met before and when the meeting took place.
Marco Rubio arrives at the Vatican to meet Pope Leo
US secretary of state Marco Rubio arrived at the Vatican to meet Pope Leo on Thursday, as he seeks to mend ties between the White House and the Holy See after a flare-up over Washington’s attack on Iran.
Pope Leo has admonished the US-Israeli military operation, triggering a fierce response from US President Donald Trump.
Leo, the first North American pope, last month said: “Woe to those who manipulate religion and the very name of God for their own military, economic and political gain, dragging that which is sacred into darkness and filth.”
Trump has called on the pontiff to “stop catering to the Radical Left and focus on being a Great Pope, not a Politician”.