Oil and markets swing as US Iran talks face ceasefire deadline pressure

Global financial and energy markets reacted sharply as tensions between the United States and Iran continued alongside uncertainty over peace talks expected in Islamabad. With a two-week ceasefire nearing its end, investors are closely watching diplomatic developments that could determine the direction of oil prices and global inflation trends.

The White House said Vice President JD Vance is prepared to return to Pakistan for fresh negotiations aimed at ending the conflict, which has already disrupted global energy supplies and heightened economic concerns.

However, tensions remain high as Iran accuses Washington of violating the fragile truce through a maritime blockade and the seizure of vessels. Tehran has also alternated between allowing and restricting passage through the Strait of Hormuz, a critical waterway for nearly one-fifth of global oil shipments.

Oil prices surge after US-Iran tensions

US President Donald Trump has maintained that the blockade will remain until a deal is reached, warning that failure to agree could lead to renewed military escalation. Iranian officials, however, have rejected negotiations under pressure, with parliament speaker Mohammad Bagher Ghalibaf stating that Tehran will not accept talks that resemble surrender.

Despite the political standoff, markets showed cautious optimism. Crude oil prices, including Brent and West Texas Intermediate, fluctuated as traders responded to shifting signals from both sides. Asian equities also gained, led by a tech-driven rally in Seoul, while other regional markets posted mixed performance.

Analysts say markets are reacting more to the possibility of progress than certainty, with investors positioning themselves ahead of the ceasefire deadline. However, the looming expiry of the truce continues to create volatility across energy and financial sectors.

The outcome of the talks is expected to have significant implications not only for regional stability but also for global inflation, energy security, and investor confidence.