Oil back above $100 as US to blockade Iranian ports after peace talks fail
Oil back above $100 as US to blockade Iranian ports after peace talks fail
Asian energy markets reopened on Monday, with oil prices climbing above $100 per barrel. The rise followed the conclusion of weekend discussions between the United States and Iran, which produced no new agreement. President Donald Trump declared intentions to impose a blockade on Iranian ports, as highlighted in his post on Truth Social.
Global benchmark Brent crude rose 7.3% to $102.30, while West Texas Intermediate increased by 8.7% to $104.94. The collapse of negotiations has heightened fears that the energy crisis could deepen. Analysts suggest that prices will remain elevated depending on the outcome of the blockade and potential spread of shipping disruptions.
“Oil prices are likely to remain elevated because expectations now depend on whether the blockade is fully implemented, whether shipping disruptions spread, and whether diplomacy resumes,” said Chua Yeow Hwee, an economist from Singapore’s Nanyang Technological University.
Prices had previously dipped below $100 on Wednesday after the US and Iran agreed to a conditional two-week ceasefire, which included reopening the key Strait of Hormuz. This strategic waterway, vital for a fifth of global energy shipments, became a focal point of the Iran-US conflict after Tehran threatened to attack vessels using it in response to US-Israeli strikes.
Since the conflict began on 28 February, oil transport through the strait has been nearly halted. However, countries like India and Malaysia negotiated safe passage for their vessels. This disruption has caused a global surge in energy costs, impacting markets worldwide.
Asian stock indexes also declined on Monday, with the Nikkei 225 in Japan dropping 0.7% and South Korea’s Kospi falling 1%. These nations, heavily dependent on Middle Eastern oil, have suffered disproportionately from the crisis. US stock futures signaled a likely lower open for Wall Street, reflecting ongoing investor anxiety.
Energy prices and financial markets have seen sharp fluctuations in recent weeks. Brent crude had fallen to about $90 a barrel on 8 April after the ceasefire deal. Since then, volatility has persisted due to uncertainty over its longevity and continued Israeli strikes on Lebanon.
“The truth is, oil prices are not as high as they normally would be” given the scale of supply disruptions, stated Saul Kavonic of MST Marquee. “But if that doesn’t happen, oil prices will head higher,” he added.
Centcom confirmed the blockade of Iranian ports and coastal areas would begin at 10:00 ET (14:00 GMT) on Monday. It would apply impartially to vessels of all nations, while allowing free movement for ships heading to non-Iranian destinations. The move followed Trump’s statement about halting traffic through the Strait of Hormuz.
Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, who led negotiations in Pakistan, emphasized the country’s refusal to yield to threats. The Islamic Revolutionary Guard Corps (IRGC) Naval Forces warned that any military vessels approaching the strait would be considered violations of the ceasefire and “dealt with severely.”
