European stock markets are projected to open flat on Tuesday, influenced by ongoing global market volatility and fluctuating oil prices.

Data from IG indicates that the UK's FTSE 100 index is expected to open 0.1% higher, while Germany's DAX, France's CAC 40, and Italy's FTSE MIB indices are all anticipated to open with little change.

During early Tuesday trading, European markets managed to recover some of their recent losses, as investors continued to assess the impact of persistent instability in the Middle East and elevated global oil prices.

Oil prices declined on Monday, with U.S. West Texas Intermediate crude trading slightly below $95 per barrel, retreating from weekend levels above $100. This movement followed media reports suggesting that the United States is preparing to announce the formation of a multinational naval coalition to escort vessels transiting the Strait of Hormuz.

U.S. Treasury Secretary Scott Bessent also stated on Monday that the U.S. would permit Iranian oil tankers to pass through the Strait of Hormuz. However, due to lingering uncertainty surrounding the U.S.-led escort alliance, oil prices increased by over 2% during overnight trading.

Traders are now shifting their focus to central bank actions scheduled for this week, with the U.S. Federal Reserve set to begin a two-day policy meeting on Tuesday.

The Fed continues to face persistent pressure from former President Trump to lower interest rates. Nonetheless, ongoing tensions related to Iran have led to a widespread expectation among traders that the Fed will maintain current interest rates when it announces its monetary policy decision on Wednesday.

Overnight, stock markets in Asia generally trended upward, while U.S. stock index futures recorded minor declines.

Corporate earnings reports from Prudential and Poste Italiane are scheduled for release on Tuesday, alongside economic data including the latest Economic Sentiment Indicator from the European Union.