The US oil benchmark rebounded above US$100 a barrel on Monday following the failure of peace talks between the United States and Iran. Market tensions further escalated after President Donald Trump ordered a blockade of Iranian ports.
Shortly after the commencement of trading, West Texas Intermediate (WTI) for May delivery rose approximately 8% to US$104.50. Simultaneously, the international benchmark Brent for June delivery increased by 7% to US$102.
These price hikes follow a brief period of decline last week when stocks soared after Trump agreed to a two-week ceasefire mediated by Pakistan.
However, that ceasefire remained fragile as Israel continued its military actions in Lebanon and the Strait of Hormuz remained effectively closed.
Collapse of negotiations in Islamabad
High-level negotiations held in Islamabad aimed at reaching a long-term resolution failed to produce a breakthrough. L
ed by Vice President JD Vance and Iran’s parliament speaker, the discussions concluded with both delegations expressing pessimism regarding a potential deal.
In the wake of these failed talks, Trump announced a US-led blockade of the Strait of Hormuz. The US military later clarified that the operations would begin Monday, specifically targeting vessels traveling to or from Iranian ports.
Continued instability in global energy corridors
Global energy markets have remained in a state of turmoil since the outbreak of conflict on Feb 28. The crisis has been compounded by Iran effectively blocking the Strait of Hormuz, a critical maritime corridor.
The significance of the strait cannot be overstated, as it normally facilitates the transit of one-fifth of the world’s total oil and gas supply.
The latest military and diplomatic developments suggest that the disruption to global energy flows may persist as both nations remain at an impasse.
