Global oil prices declined on Wednesday while stock markets traded mixed as investors assessed shifting developments in US–Iran relations following an eleventh-hour extension of a ceasefire by the US President.
Donald Trump announced that he would extend the ceasefire between the United States and Iran indefinitely, following a request from mediator Pakistan and citing the need to allow Tehran’s leadership more time to prepare a proposal.
The decision came as the two-week truce was nearing expiration, with earlier warnings that US military strikes could resume if no progress was made.
Trump also confirmed that the United States would continue its blockade of the Strait of Hormuz, a critical global oil shipping route and a major point of tension between Washington and Tehran.
“I have… directed our Military to continue the blockade and, in all other respects, remain ready and able and will therefore extend the ceasefire until such time as their proposal is submitted,” Trump wrote on social media.
The mixed signals—extending diplomacy while maintaining military pressure—left global traders uncertain about the next direction of the conflict.
A planned diplomatic engagement in Islamabad has also been thrown into doubt, with a White House official confirming that Vice President JD Vance would not travel as previously scheduled, pending Iran’s response.
Iranian officials have signaled reluctance to attend talks, citing what they described as unreasonable US demands. The semi-official Tasnim News Agency also reported that there is currently no indication that Iranian representatives will participate.
Market analysts say the uncertainty is weighing on investor sentiment.
Christopher Wong, a strategist at Oversea-Chinese Banking Corporation, said both sides appear to be testing each other’s resolve.
“The US and Iran may be trying to shore up leverage and playing a game of who blinks first,” he said. “Whatever the outcome, the suspense in the interim may see risk appetite being curtailed, but when either side blinks, risk proxies could rally.”
In energy markets, both major oil benchmarks fell after rising about 3% in the previous trading session, reflecting the fragile balance between diplomatic hopes and ongoing geopolitical risk.
