Global oil markets experienced sharp volatility on Tuesday as Brent crude futures briefly climbed toward the $100-per-barrel mark following an announcement by U.S. President Donald Trump that the ceasefire with Iran would be extended, while Washington maintains its naval blockade in strategic waters.
By 2020 GMT, Brent crude futures had risen by 4.3% to around $99.60 per barrel, while West Texas Intermediate (WTI) crude futures gained about 3.65%, trading near $90.50 per barrel. The sudden price movements reflected renewed uncertainty in global energy markets, with traders reacting to both diplomatic signals and ongoing geopolitical risks.
In a post on his Truth Social platform, Trump said he had ordered the U.S. military to “continue the Blockade” and remain on high alert, while also extending the ceasefire to allow Iranian authorities time to submit what he described as a “unified proposal” for negotiations.
The decision, according to Trump, followed a request from Pakistani leadership, including Asim Munir and Shehbaz Sharif, who urged Washington to delay any renewed military action against Iran to give diplomacy more time to develop.
Markets initially responded positively to the extension of the ceasefire, interpreting it as a temporary easing of immediate war risk. However, gains were quickly tempered by continued uncertainty surrounding the U.S. naval blockade and the absence of a concrete diplomatic breakthrough between Washington and Tehran.
Analysts noted that while the extension reduces the risk of imminent escalation, the continuation of the blockade keeps supply-side concerns firmly in place. The Strait of Hormuz, a vital passage for global oil shipments, remains a key pressure point influencing market sentiment.
The latest developments come amid ongoing efforts to restart negotiations between the United States and Iran. A planned U.S. delegation visit to Islamabad for a second round of face-to-face talks was delayed earlier in the day, reportedly due to additional policy meetings in Washington, according to U.S. media reports.
The delegation, which was expected to be led by Vice President JD Vance, was set to follow an initial round of discussions held earlier this month. That earlier meeting ended without a formal agreement, though both sides reportedly agreed to continue engagement.
Pakistan has played an increasingly visible mediating role in the process. However, officials in Islamabad said on Tuesday that Iran’s participation in the upcoming talks had not yet been formally confirmed, adding further uncertainty to the diplomatic track.
Energy markets have remained highly sensitive to developments surrounding the ceasefire, particularly due to concerns over disruptions to global crude supply routes. The Strait of Hormuz, through which a significant portion of the world’s oil trade flows, has been at the center of investor attention amid rising geopolitical tensions.
Earlier in the month, oil prices had briefly fallen and then stabilised in the $90–$95 range after announcements suggesting a temporary reopening of the Strait of Hormuz. However, that stability proved short-lived as renewed uncertainty over the ceasefire’s durability and broader U.S.–Iran relations returned to the forefront.
Traders say the current price swings reflect a market caught between hopes of diplomatic de-escalation and fears of renewed conflict. While the extension of the ceasefire offers short-term relief, the continued military posture and unresolved negotiations leave significant risk premiums embedded in oil prices.
As diplomatic efforts continue and key talks remain uncertain, analysts expect further volatility in energy markets, particularly if negotiations stall or military activity resumes in the region.
