US and Iran Consider Ceasefire Extension as Oil Prices Stabilize Near $95

TLDR

• Brent crude is trading near $95 a barrel, with West Texas Intermediate around $88–$91
• The US and Iran are considering a two-week ceasefire extension ahead of the April 21 expiration
• The Strait of Hormuz remains largely blocked, putting 3.8 million barrels of daily flow at risk
• China’s Q1 GDP grew 5% year-on-year, offering some support to oil demand expectations
• Both the IEA and OPEC have warned of softer oil demand due to war-related disruptions

Oil prices have steadied this week as the US and Iran weigh a two-week extension to their ceasefire, buying more time for peace negotiations that so far have not produced a deal.

Brent crude is holding near $95 a barrel. West Texas Intermediate is trading around $88 to $91. Both benchmarks remain roughly a third higher than before the conflict began in late February, though well below the $120 peak seen in the early weeks of the war.

The ceasefire between Washington and Tehran is set to expire on April 21. Talks held in Pakistan last weekend did not yield an agreement. Mediators are now working to arrange technical discussions on the most disputed issues, including the reopening of the Strait of Hormuz and Iran’s nuclear enrichment program.

Iran’s joint military headquarters commander Ali Abdollahi warned that if the US blockade continues, Iran will not allow any exports or imports through the Persian Gulf, the Sea of Oman, or the Red Sea.

The US has enforced a naval blockade to cut off Iranian traffic. Iran has kept the strait largely closed to other vessels. The Strait of Hormuz connects the Persian Gulf to global oil markets.

Commonwealth Bank of Australia analyst Vivek Dhar said the blockade puts at risk the roughly 3.8 million barrels of crude and products that passed through the waterway last month.

Why the Futures Market May Be Misleading

Diamondback Energy chief executive Kaes Van’t Hof said the oil futures market does not fully reflect what is happening in the physical market. He said futures are increasingly pricing in de-escalation rather than the reality on the ground.

ING Groep commodities strategist Warren Patterson echoed that view, saying any ceasefire is likely to be fragile and that US and Iranian demands remain far apart, leaving clear upside price risks ahead.

Both the IEA and OPEC have warned this week that the war is weighing on global oil demand.

China GDP Offers Partial Offset

China’s economy grew 5% year-on-year in the first quarter of 2026, meeting the upper end of Beijing’s annual target. The result was stronger than expected and helped lift sentiment around oil demand in the world’s largest crude importer.

However, economic momentum slowed toward the end of the quarter. China imports much of its crude from Iran, adding uncertainty to its outlook.

Elsewhere, Thailand is negotiating emergency oil and fertilizer supplies through Oman. In Australia, a fire at Viva Energy’s Geelong refinery is cutting into domestic fuel production. India has warned the war’s economic shockwaves could be as disruptive as the pandemic.

US President Donald Trump said this week that an end to the war is close and that further talks could take place within days.

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