Oil prices climbed on Monday after renewed tensions in the Middle East, with Iran closing the Strait of Hormuz over the weekend just a day after reopening it, citing a US blockade of its ports. The move came amid faltering hopes for a diplomatic breakthrough in the seven-week crisis.
Earlier optimism had pushed crude prices sharply lower and lifted US and European equities on Friday, after Iran indicated it would allow ships to transit the waterway again. That optimism was sparked by comments from President Donald Trump, who told AFP that a deal with Tehran was “very close” and that “no sticking points at all” remained. However, Iran quickly pushed back, insisting its stockpile of enriched uranium would not be transferred “anywhere.”
US benchmark West Texas Intermediate plunged more than 11% and Brent fell 9% on Friday. But both contracts rebounded strongly on Monday, days before a two-week ceasefire is due to expire. The rebound followed the US seizure of an Iranian ship attempting to evade a naval blockade, with Tehran warning of retaliation.
The blockade of Iranian ports has been a major obstacle in US-Iran negotiations. State broadcaster IRIB reported that Tehran has no current plans to attend the next round of talks in Pakistan, while other Iranian media cited unnamed sources saying the overall atmosphere was “not very positive.” Lifting the US blockade remains a precondition for further dialogue.
West Texas Intermediate jumped more than 7% at one point, while Brent rose over 6%. Only a single 21-hour negotiating session has taken place so far, in Islamabad on April 11, which ended inconclusively. Despite the diplomatic stalemate, Trump renewed his threat to target Iran’s infrastructure if no agreement is reached, while Iran’s Revolutionary Guards warned that any unauthorised vessel passing through the strait would be considered an enemy target.
Global equities nonetheless advanced, tracking record closes on Wall Street’s S&P 500 and Nasdaq. Asian markets including Tokyo, Seoul, and Taipei led gains, buoyed by a tech-sector rally. The dollar, which had weakened sharply on Friday, strengthened against major peers as traders assessed the fragile ceasefire and the prospects for this week’s diplomatic talks.
Analysts cautioned that without a comprehensive agreement on Iran’s nuclear programme, the ceasefire remains vulnerable to sudden shifts in sentiment and the risk of military escalation.
