Oil prices fluctuate as status of US-Iran peace talks remains unclear

Global oil prices fluctuated in early Asian trading on Wednesday as the status of peace talks between the US and Iran remains unclear.

On Tuesday, US President Donald Trump said he will extend a ceasefire with Iran until talks between the two countries have progressed. He added that the US will continue to blockade Iran's ports until Tehran presents a "unified proposal".

After opening higher, Brent crude dipped by 0.2% to $98.32 (£72.73) a barrel, while West Texas Intermediate was down by 0.3% at $89.41.

Energy markets have been volatile since the US and Israel attacked Iran on 28 February and Tehran responded with threats to target vessels in the key Strait of Hormuz waterway.

The initial two-week ceasefire had been due to expire on Wednesday evening Washington time. Trump did not give a new deadline for the ceasefire extension.

Trump said on Truth Social that the Iranian government has been "seriously fractured" and that the US will hold off from launching new attacks after Pakistan called for more time for Tehran to agree a deal.

Vice President JD Vance, who is leading the US negotiations, had been expected to fly to Islamabad in Pakistan for talks on Tuesday. The White House has now said he will not be going.

Iran has also not decided whether to send a delegation to Pakistan for talks with the US, a foreign ministry spokesperson told the BBC.

Traders remain cautious about what wil happen next in the war, said lecturer Jiajia Yang from Australia's James Cook University.

"This is less about barrels [of oil] and more about expectations," Yang said.

The cost of crude has soared since the start of the conflict due to the Strait of Hormuz, through which a fifth of the world's energy usually passes, being effectively closed by Iran.

Earlier this month, the US also said it would intercept ships headed to or from Iranian ports.