European stock markets are poised for a muted start on Thursday as investors weigh shifting geopolitical developments against a notable decline in global oil prices. Financial indicators suggest that major indices, including the U.K.’s FTSE, Germany’s DAX, and France’s CAC 40, will likely open near the flatline, while Italy’s FTSE MIB is projected to see a marginal gain of 0.1%.

The cautious sentiment in Europe follows a period of volatility in the energy sector. Crude oil prices dipped below the $100 per barrel threshold on Wednesday, with West Texas Intermediate futures dropping over 5% to close at $98.26. Similarly, international benchmark Brent crude saw a decline of more than 5%, settling at $105.02. This downward pressure on energy costs follows reports that diplomatic negotiations involving the United States and Iran have entered their final stages.

Despite a wave of optimism in Asia-Pacific markets fueled by hopes for a de-escalation of tensions in the Middle East, European bourses remain largely unmoved. The diplomatic shift comes after recent signals that military actions were paused to prioritize peaceful resolutions at the request of regional allies. As the trading day progresses, market participants will be turning their attention to corporate earnings, with notable reports expected from Generali and BT Group. There are no significant economic data releases scheduled for the session.