Oil prices ease after early surge as ceasefire efforts temper market fears

Oil prices pared earlier gains Monday after surging nearly 7%, as diplomatic efforts led by Pakistan to preserve a ceasefire between the United States and Iran offered some relief to global energy markets.

Brent crude futures were trading near $100 per barrel as of 1410GMT, after rising sharply earlier in the session. Markets weighed signs that the truce was holding despite unresolved issues between Washington and Tehran.

Pakistan Prime Minister Shehbaz Sharif said after talks in Islamabad involving US and Iranian officials that the ceasefire remained in place and that “all efforts” were being made to resolve pending issues.

“While the two-week ceasefire between the warring parties still stands, all efforts are being made to solve some pending issues,” Sharif said.

The partial pullback in oil prices came as markets balanced cautious optimism over diplomacy against fresh military developments in the region.

US Central Command’s blockade of all maritime traffic entering and exiting Iranian ports took effect at 1400GMT, keeping concerns about supply disruptions in focus and limiting the decline in crude prices.

Markets have remained highly sensitive to any escalation involving Iran, a major oil producer near the Strait of Hormuz, a key chokepoint for global crude and fuel shipments.