June 15 (Reuters) - European shares were set to open higher on Monday as oil prices tumbled after the United States and Iran reached a preliminary peace agreement that would open the Strait of Hormuz and end the three-month-long conflict in the Middle East.
Global risk sentiment got a lift and Brent crude prices dropped 4% after U.S. and Iranian officials said they had agreed on a framework for a deal, scheduled to be signed on Friday.
Futures tracking the pan-European STOXX 600 index rose 1.6%, as
of 0635 GMT, with contracts tracking Germany's DAX and France's CAC 40 index up 1.7% and 1.4%, respectively.
The benchmark STOXX 600 rallied on Friday and came within striking distance of hitting a record high on hopes for a diplomatic breakthrough in the Middle East.
European shares had broadly underperformed their peers in the U.S. and China since March, largely due to the continent's reliance on the Strait of Hormuz for crucial oil supplies. Concerns over energy-induced inflation heating up had the European Central Bank hike interest rates by 25 basis points last week.
Traders continue to anticipate another 25 bps ECB rate hike before the end of the year, according to LSEG-compiled data.
In corporate news, carmaker Renault Group said it will develop a military vehicle in partnership with defence technology company Thales.
Schneider Electric said it had entered a strategic collaboration with Taiwan's Foxconn to develop and scale infrastructure for next-generation AI data centres.
Energy price-sensitive travel and leisure stocks are likely to advance at open, while energy stocks are likely to fall, tracking lower crude prices.
(Reporting by Utkarsh Hathi in Bengaluru; Editing by Janane Venkatraman)
