-- Crude oil futures settled higher in after-hours trading on Tuesday after President Trump extended the ceasefire with Iran, though he maintained a naval blockade of the Strait of Hormuz and Tehran's ports.
Front-month West Texas Intermediate crude futures climbed by 3.20% to $90.22 per barrel, while Brent futures rose 3.90% to $99.14/bbl.
Hours before a two-week ceasefire with Iran was set to expire on Wednesday, Trump said in a social media post that he was extending the truce at the request of Pakistani mediators. Iranian officials did not immediately respond to the announcement.
Trump said that a ceasefire would stay in effect until the Iranian leadership could come up with a proposal for a permanent resolution.
Calling the Iranian government "seriously fractured," Trump said he made the decision at the request of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif of Pakistan.
"... we have been asked to hold our attack on the country of Iran until such time as their leaders and representatives can come up with a unified proposal," Trump said in a social media post on Tuesday.
However, the US President said that the US would hold off on fresh attacks on Iran but that a naval blockade of the Hormuz would continue until "discussions are concluded, one way or the other."
Dan-Bunkering strategists said in a note on Tuesday that the crude market has been heavily driven by news flow, and this is expected to remain the case in the coming week.
Iran has alleged that the US breached its commitments under a 10-point framework that Iran offered at the start of a fragile ceasefire.
On Tuesday, Iran's Foreign Minister Abbas Araqchi said the US blockade of Iranian ports was an "act of war" and thus a violation of the ceasefire.
"Blockading Iranian ports is an act of war and thus a violation of the ceasefire," Araqchi said in a social-media post on X. "Striking a commercial vessel and taking its crew hostage is an even greater violation."
The Department of War, previously the Department of Defense, said on Tuesday that the US forces stopped and boarded a sanctioned oil tanker in its campaign to disrupt Iran's shipping network.
"US forces have boarded the crude oil tanker Tifani in the Indian Ocean, in what appears to be a further escalation in enforcement against Iran-linked shipping," MarineTraffic said in a social media post on X.
Kpler strategists said daily transits via the Strait increased modestly, though activity remains well below normal levels.
"Commercial movements are still constrained by heightened security risks, including three new attacks over the past four days and persistent uncertainty over sea mine clearance," the analysts said.