Oil Steadies Just Below $100 as U.S. Extends Iran Ceasefire

Key Moments

Crude Oil Holds Firm Despite Ongoing Hormuz Blockade

Brent crude futures eased slightly on Wednesday but continued to trade just under the $100 mark after the United States moved to prolong its ceasefire with Iran, even as a blockade of the Strait of Hormuz largely stayed in place.

At 03:48 GMT, Brent crude futures were down 0.2 percent at $98.27 per barrel. West Texas Intermediate (WTI) crude futures fell 0.4 percent to $89.28 per barrel.

Both benchmarks had climbed about 3 percent in the previous session. On Monday, oil prices advanced more than 5 percent after the U.S. seized an Iranian cargo vessel that was alleged to have tried to breach Washington’s blockade of the key shipping route. Tehran had previously warned that it would retaliate.

Trump Extends Ceasefire, Cites Pressure on Iranian Finances

In a post on Truth Social, U.S. President Donald Trump announced that he would extend the ceasefire with Iran indefinitely, just hours before it was due to lapse, in order to allow peace discussions with Tehran to continue.

In a separate post, Trump asserted that Iran was “collapsing financially”.

“They want the Strait of Hormuz opened immediately — starving for cash! Losing $500 million a day,” he said.

Iranian Response and Strait of Hormuz Standoff

The semi-official Tasnim news agency, which is linked to Iran’s Revolutionary Guards, reported that Tehran had not sought an extension of the ceasefire.

According to Tasnim, Iran would not reopen the Strait of Hormuz – which typically handles about 20 percent of global oil shipments – as long as the U.S. naval blockade remains in effect, and would be prepared to break the blockade by force if required. The report cited unnamed sources.

Market Sentiment: Unclear Direction Amid Closed Strait

Market participants highlighted the uncertainty confronting energy prices given the unresolved status of the talks and the continued disruption at the strait.

“With the outcome of talks still unclear and the strait closed, the market lacks clear direction,” Reuters quoted Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, as saying.

Kikukawa added that, in the absence of renewed fighting, crude prices are likely to hover around current levels for the time being.

Broader Market Impact and Risk Perception

Christian Gattiker, head of research at Julius Baer, noted that the Middle East conflict – and any further progress towards a settlement – is expected to remain a key driver for financial markets, contingent on how events unfold.

“Yet compared to a month ago, its grip on markets has clearly loosened. It would likely take a renewed and significant escalation to return it to the same level of dominance that previously dictated sentiment almost single-handedly,” he added.

Gold and Regional Equity Moves

Gold prices advanced 1.2 percent to $4,759 per ounce early on Wednesday after having touched their lowest level since April 13 earlier in the session.

In equity markets, Saudi Arabia’s main stock index slipped 0.2 percent on Tuesday. Shares of Saudi National Bank declined 2 percent, while Sabic Agri-Nutrients, an Aramco subsidiary, dropped 6 percent.

The Dubai and Abu Dhabi stock exchanges finished the session higher, with gains of 0.3 percent and 0.2 percent, respectively.

Key Market Metrics

Related Reading

• Call it what it is: the War of Hormuz
• Why Hormuz is no Suez or Panama
• Tanker flows shift away from Hormuz to the Atlantic