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
Following the collapse of weekend negotiations, oil prices surged past the $100 threshold on Monday, driven by renewed tensions in the Middle East. The US announced plans to restrict maritime traffic through Iranian ports, escalating fears of a deeper energy crisis. Brent crude, the global benchmark, climbed 7.3% to $102.30 (£76.32), while West Texas Intermediate rose 8.7% to $104.94.
The US and Iran’s failed talks have intensified concerns about supply chain instability. Prices had dropped below $100 last Wednesday after a conditional ceasefire agreement was reached, which included reopening the Strait of Hormuz—a critical chokepoint for global energy flows. This strait, through which roughly 20% of the world’s oil transit occurs, has become a focal point of the conflict following Tehran’s threats to target vessels using it.
Market Reactions and Analyst Perspectives
Asian energy markets reopened with optimism, but broader financial indicators showed mixed signals. The Nikkei 225 in Japan fell 0.7%, and South Korea’s Kospi declined by 1%. Analysts highlighted the region’s vulnerability to disruptions, as Asian nations rely heavily on Middle Eastern oil supplies. Stock futures also suggested a cautious outlook for Wall Street, with investors monitoring the potential for prolonged shipping blockades.
“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 at Singapore’s Nanyang Technological University.
Saul Kavonic of MST Marquee noted that the current price levels reflect a return to pre-ceasefire conditions. “The truth is, oil prices are not as high as they normally would be,” he explained, “but if the conflict intensifies, the market could see further gains.”
President Donald Trump’s directive to block all vessels in the Strait of Hormuz triggered immediate action. US Central Command (Centcom) confirmed the blockade would commence at 10:00 ET (14:00 GMT) on Monday, applying pressure “impartially against vessels of all nations” entering or exiting Iranian ports. However, ships heading to non-Iranian destinations would remain unaffected.
“The US will start ‘BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz’,” Trump stated on Truth Social. “This measure is a clear signal of our commitment to protecting energy interests.”
Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, who represented the nation in peace talks, emphasized resistance to external pressures. “Iran will not submit to any threat,” he declared in a local media statement. Meanwhile, the Islamic Revolutionary Guard Corps (IRGC) Naval Forces warned that any military ships approaching the strait would be seen as breaking the ceasefire and “dealt with severely.”
