Energy firms that posted dramatic gains included Premier Oil, which ended up around 17 percent, and Tullow Oil, which closed around 6 percent higher. In explanation, analysts said that traders who had bet these stocks would fall by shorting them were facing a squeeze and being pressured to sell, pushing prices higher.
German stocks were pressure lower on Tuesday, after closely watched economic sentiment figures from the ZEW Institute came in weaker than expected. The index rose to 54.8 in March, which was the highest reading since February 2014, but below forecasts for a reading of 58.2.
Other data included euro zone inflation for February, which was confirmed at -0.3 percent (year-on-year).
Meanwhile, global markets focused on the U.S. Federal Reserve statement due on Wednesday. Speculation has mounted that the Fed could drop the word "patience" from its guidance about the pace at which it will normalize monetary policy. Some investors think the central bank could raise interest rates as early as June.
Greece is set to top the agenda at a European Union (EU) summit scheduled for later this week. The prospects of a funding deal being struck will likely depend on Greece's new socialist government agreeing to continue with reforms.
The benchmark Athens Composite index ended around 0.9 percent higher on Tuesday.