Oil prices extended gains for a second day after US President Donald Trump announced an extension of the ceasefire with Iran, even as peace negotiations showed signs of faltering. The extension came despite ongoing tensions, with Trump maintaining a blockade of the Strait of Hormuz that continues to restrict oil flows through one of the world's most critical shipping lanes.

Energy markets responded positively to the truce extension, which traders viewed as reducing the immediate risk of military escalation in the Persian Gulf. The Strait of Hormuz handles roughly 20% of global oil shipments, making any disruption there particularly impactful for global energy prices. The blockade has kept significant volumes of oil locked up, creating supply concerns that have supported higher prices.

The fragile peace talks and continued blockade create a complex situation for oil markets. While the truce extension provides some stability, the unresolved blockade maintains upward pressure on prices. Traders are now watching closely to see if negotiations can progress beyond the current impasse and whether the blockade will be lifted, potentially releasing pent-up supply into the market.