Oil Rises, Trump Rejects Iran's Response!
Oil prices surged on Monday after US President Donald Trump called Iran's response to the US peace proposal "unacceptable." The market again assessed increased supply risks as the Strait of Hormuz remains largely closed, keeping global energy markets tight.
At 03:40 GMT, Brent rose US$4.16 (+4.11%) to US$105.45/barrel, while WTI rose US$4.38 (+4.59%) to US$99.80/barrel. This increase comes after both contracts fell by around 6% last week on hopes that the conflict would soon subside and oil flows would resume through Hormuz.
Market participants believe that prices are increasingly driven by geopolitical headlines. Analysts note that any comments or denials from Washington and Tehran trigger sharp price swings, reflecting the high risk premium while key energy shipping routes remain disrupted.
The focus next turns to Trump's visit to Beijing this week, with discussions on Iran said to be on the agenda. The market sees the possibility that China could use its influence to push for a more comprehensive ceasefire and help ease the disruption in Hormuz.
However, the market outlook is starting to shift to a longer-term impact. The CEO of Saudi Aramco stated that the world has lost around 1 billion barrels in the past two months and that the market will take time to stabilize even if flows return to normal. Similarly, ING analysts believe the geopolitical risk premium could remain attached to prices, and expect Brent to remain above US$90 throughout 2026 and US$80–85 in 2027.
5 key points:
- Oil surged after Trump rejected Iran's response, rekindling supply concerns.
- Brent was US$105.45 (+4.11%) and WTI was US$99.80 (+4.59%) at 03:40 GMT.
- Last week, prices fell ~6% on hopes of a easing of the conflict and the reopening of Hormuz.
- The market is now awaiting the impact of Trump's visit to China and Beijing's potential role in the Iran issue.
- Supply risks are considered persistent: a loss of ~1 billion barrels in two months, and geopolitical premiums are expected to persist until 2026–2027. (asd)*
Source: Newsmaker.id
