European Union foreign ministers signed off on a coordinated package lifting sectoral sanctions against Iran in an emergency Saturday-afternoon meeting in Brussels, capping six weeks of intensive negotiations and dovetailing with the Islamabad ceasefire signing earlier in the day. The agreement, drafted by EU High Representative Kaja Kallas, paves the way for the immediate resumption of Iranian crude oil exports to European refiners and the targeted unfreezing of approximately €4.8 billion in Iranian assets held in EU member-state accounts.
The package preserves human-rights and ballistic-missile sanctions while suspending energy-, banking-, and shipping-related measures. Iran's Bandar Abbas and Kharg Island terminals are expected to load European-bound cargoes by midweek. Mediterranean refiners, including Italy's Eni and Spain's Repsol, were among the first to issue informal interest letters for Iranian Heavy crude — historically a preferred grade for European complex refining configurations.
Euro Stoxx Futures Climb
Euro Stoxx 50 futures added 1.9% in Saturday electronic trading, while DAX futures gained 2.2% and CAC 40 futures climbed 2.0%. The euro pushed past $1.135 against the dollar, trading at a 12-week high. European bank stocks are expected to outperform Monday on the combination of falling oil-driven inflation expectations and positive credit-spread implications from the geopolitical de-escalation.
European refiners and airlines were the most prominent overnight movers in ADR trading. Lufthansa, Air France-KLM, IAG, and Ryanair all traded sharply higher in U.S. dealing, while jet fuel forward curves declined approximately 11% for May delivery. JPMorgan transport analyst Jaime Rowbotham wrote that "European carriers were among the most underweight equity sectors heading into the resolution. Reweighting will be aggressive."
ECB May Reconsider Rate Path
European Central Bank rate-cut expectations, which had been pushed out by the energy-driven inflation rebound, are now snapping back. Overnight index swaps imply a 78% probability of a 25-basis-point ECB cut at the June 4 Governing Council meeting, up from 32% a week earlier. ECB chief economist Philip Lane is scheduled to deliver a closely watched speech in Frankfurt Tuesday that markets expect to acknowledge the dramatically changed energy backdrop.