Iraq Oil Agreement Drives Crude Price Decline

International crude oil prices plummeted following an agreement between Iraq's central government and the Kurdistan Regional Government to resume oil exports through the Kirkuk-Ceyhan pipeline. European stock markets responded with gains for the third consecutive trading session, marking their longest rally in a month.

According to multiple foreign media sources, the Baghdad-Erbil agreement has restored the flow of approximately 250,000 barrels per day to Turkey's Ceyhan port. The accord was reportedly facilitated in part by U.S. diplomatic pressure. Brent crude prices immediately declined in response to the news.

European Markets Rally in Unison

The pan-European STOXX 600 index rose 0.5% to 605.59 points in mid-morning trading. Analysts attribute the improved investor sentiment to expectations of easing energy cost pressures.

London's FTSE 100 index briefly dipped to 10,324 points during the session, but overall market sentiment remained positive. Despite weakness in mining and commodity stocks due to falling raw material prices, expectations of reduced energy costs provided underlying support for the markets.

Fed Rate Decision in Focus

Investors are closely monitoring the U.S. Federal Reserve's interest rate decision scheduled for late Wednesday. The Fed is expected to hold its benchmark rate steady in the 3.5-3.75% range, with the impact of energy cost surges on inflation forecasts being a key concern.

Fed Chair Jerome Powell is scheduled to explain the appropriateness of the rate hold decision, inflation priorities for the year, and the economic impact of the Iran conflict during his post-meeting press conference.

Commodity Market Developments

Gold prices fell 1.5%, while copper prices plunged 3.1%. As a result, mining stocks including Fresnillo, Anglo American, and Rio Tinto recorded significant losses on the FTSE 100.

Prudential reported new business profits of $2.78 billion, exceeding market expectations, but its shares fell 3.4% as its free surplus ratio of 221% came in below the market consensus of 230%. Unilever also declined 2.6%, leading weakness in the consumer goods sector.