Oil prices whipsaw after Trump extends ceasefire with Iran but keeps blockade in place

International benchmark Brent crude and U.S. West Texas Intermediate futures edged into positive territory by 4:52 a.m. ET, after sliding earlier in the day. Brent contracts for June delivery were last seen trading 1.4% higher at $99.81 per barrel, while WTI futures gained 1.3% to settle at $90.86.

Trump said Tuesday that the U.S. would prolong its temporary truce with Iran beyond the previously set deadline, citing a “seriously fractured” political situation within Tehran.

The ceasefire will remain in place until Iranian leaders present a unified proposal to end hostilities with Washington and Israel, he said in a post on Truth Social. In the meantime, the U.S. would continue its blockade of Iran’s ports.

The ceasefire extension underscores the uncertain path toward de-escalation. While the move delays the risk of imminent military strikes, it also highlights deep divisions within Iran’s leadership and the lack of a clear diplomatic breakthrough.

Earlier on Tuesday, oil prices rose after it became clear that Vice President JD Vance had not departed for Pakistan, where peace talks with Iran were supposed to resume.

However, Iranian state news outlet Tasnim reported that negotiators from Tehran had informed their U.S. counterparts through an intermediary in Pakistan that they would not appear for further talks.

“Iran ultimately announced today that under these circumstances, attending the negotiations is a waste of time because the US prevents reaching any suitable agreement,” Tasnim reported.

Russ Mould, investment director at AJ Bell, said in a Wednesday note that mixed messages from Trump, and the president’s insistence that the U.S. blockade will continue, meant investors were “still playing a guessing game.”

“Suggestions from the Iranian side that they will not attend today’s talks in Pakistan and an attack on a container ship off Oman add to the fog of uncertainty,” Mould said. “Having tipped into alarm bell territory above $100 per barrel, oil prices have now dipped below this level — but they still tell a story of distress in global energy markets.”