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
Global oil prices climbed past the $100 threshold on Monday as Asian energy markets reopened, fueled by President Donald Trump’s announcement to implement a blockade on Iranian ports following stalled negotiations with Tehran. Brent crude surged 7.3% to $102.30 (£76.32), while West Texas Intermediate gained 8.7% to $104.94. The collapse of weekend talks heightened fears that the ongoing energy crisis could worsen.
Strait of Hormuz remains critical battleground
The strait, a vital artery for 20% of global energy traffic, has become a focal point of the conflict after Tehran vowed retaliation against US-Israeli strikes. Shipments through the waterway have been severely disrupted since the crisis began on 28 February. Despite this, nations like India and Malaysia secured safe passage for their vessels through diplomatic efforts.
Prices had dropped below $100 last Wednesday following a conditional two-week ceasefire agreement between Washington and Tehran. However, the latest developments have reversed this trend, with concerns growing about potential escalation. The US Central Command (Centcom) confirmed the blockade will commence at 10:00 ET (14:00 GMT) on Monday, targeting all ships entering or leaving Iranian ports.
“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 economist Chua Yeow Hwee from Singapore’s Nanyang Technological University.
Asian stock indexes faced declines on Monday, with Japan’s Nikkei 225 dropping 0.7% and South Korea’s Kospi falling 1%. The region has been disproportionately affected by the crisis due to its heavy reliance on Middle Eastern oil imports. US stock futures also signaled a weaker start for Wall Street, reflecting market uncertainty.
Analyst Saul Kavonic from MST Marquee noted that oil prices have returned to levels seen before the recent ceasefire deal. “The truth is, oil prices are not as high as they normally would be,” he explained, “but if the conflict continues, prices will rise further.” The blockade’s implementation and the potential for expanded disruptions are key factors influencing market sentiment.
Trump declared the blockade via a post on Truth Social, stating the US would prevent all vessels from accessing the Strait of Hormuz. Centcom emphasized the measure would apply “impartially” to ships of all nations, while ensuring non-Iranian vessels could still transit the waterway. Iranian parliamentary speaker Mohammad Bagher Ghalibaf, who represented Tehran in talks, warned the country would not “submit to any threat” in a statement released by local media.
The Islamic Revolutionary Guard Corps (IRGC) Naval Forces reiterated that any military ships approaching the strait would be deemed to violate the ceasefire, prompting severe action. The situation underscores the fragile balance between economic stability and geopolitical tensions in the region.
