Oil futures slipped in unsettled Asian trading after U.S. President Donald Trump announced an indefinite extension of a ceasefire with Iran, a move intended to allow continued peace talks. Despite the extension, uncertainty about the outlook for negotiations and ongoing supply interruptions left markets jittery.
Brent crude futures were down 0.4% at $98.13 a barrel, while West Texas Intermediate futures fell 0.4% to $85.59 a barrel by 21:03 ET (01:03 GMT). Earlier in the session both benchmarks oscillated between gains and losses as traders weighed conflicting signals about the conflict and shipping flows.
Losses were limited in part because key supply concerns remain unresolved. The Strait of Hormuz remains closed and a U.S. naval blockade against Iran has largely stayed in place, keeping vessel movements through the narrow channel extremely light. Market participants continued to monitor scant ship traffic through Hormuz as an indicator of potential further supply disruption.
Trump on Tuesday said he would indefinitely extend the ceasefire with Iran, a step he said was designed to enable additional talks aimed at ending the conflict. The president later said Iran was losing $500 million each day as a result of the closure of Hormuz, and he argued that any deal with Iran could not proceed while a naval blockade remained in effect.
Hormuz is central to the dispute because the channel carries around 20% of the world’s oil consumption. Disruptions to shipping after Iran effectively blocked the crossing have been a significant factor behind higher crude prices since the conflict began in late-February.
Axios reported that Trump was considering extending a waiver that allows foreign-flagged cargo ships to move fuel between domestic U.S. ports. The president had initially announced a 60-day waiver in mid-March to facilitate greater domestic fuel distribution as a way to mitigate the impact of higher oil prices tied to the Iran conflict.
The status of future talks between the United States and Iran remained unclear. Both Tehran and Washington declined to send representatives for further negotiations in Pakistan this week, leaving the timetable for any resumed face-to-face diplomacy in doubt.
It was not immediately clear whether Iran had accepted the ceasefire extension; there was no official response from the country’s top leaders on the extension. Iranian officials had previously indicated that they would not negotiate while a U.S. naval blockade was in place.
With the Strait of Hormuz still closed and naval restrictions affecting shipping, markets continued to price in a risk premium tied to potential supply interruptions even as the ceasefire extension offered a window for talks. The combination of unclear diplomatic momentum and persistent logistical obstacles kept trading volatile and prevented a decisive move lower in oil prices.