Oil gains as fragile Iran ceasefire keeps Hormuz largely shut
Oil markets rose after Trump said the Iran ceasefire was on life support, with Hormuz disruption still clouding global supplies
Oil prices settled higher on Monday after US President Donald Trump said the ceasefire with Iran was “on life support”, deepening market concerns over prolonged disruption to energy flows through the Strait of Hormuz.
Brent crude rose US$2.92, or 2.88%, to settle at US$104.21 a barrel, while US West Texas Intermediate gained US$2.65, or 2.78%, to US$98.07. During the session, Brent touched US$105.99 and WTI reached US$100.37.
The rebound came after both benchmarks posted weekly losses of around 6% last week, when traders had hoped the 10-week-old conflict might be nearing an end and that oil shipments through the strait could resume.
Those hopes faded after Trump dismissed Tehran’s response to a US peace proposal as unacceptable. Iran’s reply called for an end to the war on all fronts, compensation for damage, recognition of its sovereignty over the Strait of Hormuz, an end to the US naval blockade, guarantees against further attacks, the lifting of sanctions and the restoration of Iranian oil exports.
The Strait of Hormuz remains a key pressure point in the crisis. OPEC output dropped in April to its lowest level in more than two decades as the war effectively shut the waterway and forced export cuts, according to a Reuters survey.
Trump is expected to travel to Beijing on Wednesday, where Iran is set to be among the issues discussed with Chinese President Xi Jinping. Analysts said markets would be watching closely for any sign that China could help steer Tehran and Washington back towards negotiations.
