LONDON – Oil markets opened on a shaky note before slipping back, as traders reacted to a fresh wave of geopolitical developments between the US and Iran.
Early gains in crude prices quickly faded after news of ceasefire extension added both relief and uncertainty to an already fragile market. As investors tried to make sense of shifting signals from diplomacy and ongoing tensions around key supply routes, including the Strait of Hormuz, prices lost momentum and edged lower.
Oil prices dipped in volatile trading after an early surge in Asia, as investors reacted to escalating geopolitical uncertainty surrounding US–Iran tensions, a fragile ceasefire extension, and a near-paralysed Strait of Hormuz.
Brent crude slipped 0.2% to around $98.27 a barrel after briefly surging to $99.38, while US West Texas Intermediate fell 0.3% to $89.39 after touching $90.71 earlier in the session. Both benchmarks had jumped roughly 3% in the previous trading day, reflecting heightened market anxiety.
The swing in prices came after US President Donald Trump announced an indefinite extension of the ceasefire with Iran, made just hours before its expiration. The move is intended to allow more time for negotiations aimed at ending a conflict that has already caused thousands of deaths and rattled global markets. However, it remains unclear whether Iran—or US ally Israel—will agree to extend the truce, which only began two weeks ago.
Markets reacted with caution, with analysts warning that the situation remains highly unstable. The diplomatic progress and the continued closure of the Strait of Hormuz left oil markets without direction, adding that prices are likely to stay range-bound unless fighting resumes or tensions ease significantly.
Trump also escalated the situation further by stating that American Navy will continue enforcing a blockade on Iranian ports and coastal areas, a move Iranian authorities have condemned as an act of war.
Iran has not issued a formal response from its top leadership regarding the ceasefire extension. However, media linked to the Islamic Revolutionary Guard Corps reported that Tehran did not request any extension and reiterated its position that it would resist the US blockade, including by force if necessary.
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