Global oil prices swung erratically in early Asian trading on Wednesday, reflecting deep market anxiety over the uncertain status of peace negotiations between the United States and Iran.
President Donald Trump announced on Tuesday that a temporary ceasefire with Iran would be extended, though he declined to set a new expiration date. He stated that U.S. forces would maintain a naval blockade of Iranian ports until Tehran presented a "unified proposal."
Following the announcement, Brent crude futures dipped 0.2% to $98.32 per barrel, while West Texas Intermediate fell 0.3% to $89.41. This volatility continues a pattern seen since late February, when U.S. and Israeli strikes on Iran prompted Tehran to threaten shipping in the critical Strait of Hormuz—a waterway that typically handles one-fifth of the world's seaborne oil.
"This is less about barrels [of oil] and more about expectations," said Jiajia Yang, a lecturer at Australia's James Cook University. "Traders remain cautious about what will happen next in the war."
The cost of crude has surged since the conflict began, largely due to the effective closure of the Strait of Hormuz by Iran. Compounding the pressure, the U.S. recently declared it would intercept vessels traveling to or from Iranian ports.
Diplomatic movements added to the confusion. U.S. Vice President JD Vance, who is leading negotiations, canceled a planned trip to Islamabad for talks. Meanwhile, an Iranian foreign ministry spokesperson told the BBC that Tehran has not yet decided whether to send a delegation to Pakistan for discussions with American officials.
President Trump suggested on social media that the Iranian government is "seriously fractured" and that the U.S. would refrain from further attacks after Pakistan requested more time for a potential deal. With the diplomatic path unclear and military tensions simmering, energy markets are bracing for more turbulence ahead.