Oil Rises, Hormuz Nearly Closed After US-Iran Talks Stall
Oil prices rose after efforts to resume peace talks over the Iran war stalled, while the Strait of Hormuz remained nearly impassable, prolonging supply disruptions from the Middle East. This further weighed on global market sentiment as energy and inflation risks remained high.
Brent briefly rose as much as 2.5% to $107.97 per barrel, and WTI moved near $97, before paring some of its gains after Axios reported Tehran had offered the US a new proposal to reopen the strait. At the end of the Asian session, Brent rose 1.1% to $106.46 (11:30 a.m. Singapore time), while WTI rose 0.8% to $95.15.
A ceasefire has been generally holding since early April, but the blockade by the US and Iran has reduced daily transit through Hormuz to near zero. This disruption has squeezed supplies of crude oil, fuel, natural gas, and fertilizer, raising concerns of an inflation crisis. Mona Yacoubian of the Center for Strategic and International Studies (CSIS) stated that traffic in the strait remains halted and the situation is likely at a "stalemate," although neither side is believed to be seeking a return to open conflict.
Axios reported that Iran, through Pakistani mediators, has proposed a deal to open the strait and end the war, while nuclear talks have been postponed to a later stage. Trump is said to be meeting on Monday with his national security and foreign policy teams to discuss the stalled negotiations. Earlier, Trump canceled a planned trip by senior envoys to Pakistan, saying Iran "offered a lot, but not enough," while Iranian President Masoud Pezeshkian asserted that Iran would not enter into "forced negotiations" under threat or blockade.
The war, which is entering its ninth week, is said to have driven up energy prices and triggered shortages of certain products like LPG in India, as well as causing airlines to reduce flights. The International Energy Agency (IEA) has described this conflict as the largest supply shock in history. Some market participants believe that if the Hormuz closure continues, global consumption will need to adjust lower to match a supply drop of at least 10%, with the risk of widespread "demand destruction."
On the blockade enforcement front, Centcom stated that US forces intercepted sanctioned vessels in the Arabian Sea and redirected them to Iran under escort, with a total of 38 vessels diverted since the blockade began. On the sanctions front, the US also imposed sanctions on Hengli Petrochemical (Dalian) Refinery for alleged links to Tehran, while the company denies any trade with Iran. Regarding prices, Karobaar Capital CIO Haris Khurshid estimates Brent could potentially move in the $100–$115 per barrel range unless a broader regional escalation occurs.
5 key points (detailed & simplified):
- Oil rises as US–Iran talks stall and Hormuz remains virtually closed, prolonging supply disruptions.
- Brent briefly rose 2.5% to $107.97; Brent June rose 1.1% to $106.46, and WTI June rose 0.8% to $95.15.
- Axios: Iran proposes opening the strait via Pakistani mediators; Trump scheduled to meet with security team on Monday.
- Hormuz transits have fallen to near zero; supply disruptions increase the risk of inflation and potential demand destruction.
-Centcom: 38 vessels have been diverted since the blockade; the US increases pressure through sanctions on parties suspected of being linked to Iranian oil exports. (asd)*
Source: Newsmaker.id
