Oil prices surged more than 3% on Monday after the United States and Iran failed to agree on a proposed peace deal, while continued disruption in the Strait of Hormuz kept global energy supplies under pressure.
Brent crude futures climbed US$3.18, or 3.14%, to US$104.47 a barrel, extending gains from the previous session. US West Texas Intermediate crude rose US$3.09, or 3.24%, to US$98.51 a barrel.
Market sentiment weakened after US President Donald Trump rejected Iran’s response to a US-backed peace proposal, describing it as “unacceptable”. Hopes for a breakthrough in the 10-week conflict had previously supported expectations that oil flows through the Strait of Hormuz could normalise.
Attention has now shifted to Trump’s upcoming visit to Beijing this week, where discussions with Chinese President Xi Jinping are expected to include the Iran conflict and disruptions to energy supply routes.
Analysts said concerns over prolonged instability in the Middle East continued to support crude prices, particularly as the Strait of Hormuz remains largely restricted.
Saudi Aramco chief executive Amin Nasser warned that the global market has lost around one billion barrels of oil supply over the past two months, adding that the energy market would require time to stabilise even if normal flows resume.
Shipping data from Kpler also showed that two more crude tankers exited the Strait of Hormuz with tracking systems switched off last week to avoid potential attacks, highlighting ongoing risks to oil transportation in the region.
Reuters
