Brent hovers near $100 after Trump prolongs Iran ceasefire

• US announces indefinite extension of truce
• Brent down 0.2%, WTI loses 0.4%
• Trump says Iran ‘collapsing financially’

Brent crude prices edged lower on Wednesday but remained near $100 following a US extension of its ceasefire with Iran, while a blockade of the Strait of Hormuz broadly persisted.

At 03:48 GMT, Brent futures were down 0.2 percent at $98.27 a barrel. West Texas Intermediate crude oil futures lost 0.4 percent, trading at $89.28 a barrel.  

Both benchmarks rose about 3 percent on Tuesday. On Monday, oil gained more than 5 percent after the US seized an Iranian cargo ship that allegedly attempted to break Washington’s blockade of the waterway. Tehran had warned of retaliation.

In a post on Truth Social, US President Donald Trump said he would indefinitely prolong the ceasefire, hours before its expiry, to let peace talks with Iran continue. 

In another post, he claimed Iran was “collapsing financially”.

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

Tasnim, a semi-official news agency associated with Iran’s Revolutionary Guards, said Tehran had not requested an extension of the ceasefire.

Iran will not open the strait — which normally channels about 20 percent of global oil — at least as long as the US naval blockade remains, and will break the blockade by force if necessary, Tasnim quoted unidentified sources as saying.

“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.

Unless fighting resumes, prices are likely to stay near current levels for now, he said.

Christian Gattiker, head of research at Julius Baer, said the conflict in the Middle East – and any potential further steps towards resolution – would likely still dominate headlines, depending on developments. 

“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 prices were up 1.2 percent at $4,759 per ounce early on Wednesday, after hitting their lowest since April 13 earlier in the session.  

Saudi Arabia’s benchmark stock index fell 0.2 percent on Tuesday, with Saudi National Bank and Sabic Agri-Nutrients, an Aramco subsidiary, declining 2 percent and 6 percent, respectively.  

The Dubai and Abu Dhabi stock exchanges closed 0.3 percent and 0.2 percent higher.

Further 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