Oil Prices Surge on Trump's Rejection of Iran's Response
Brent crude futures climb $4.04 as tensions escalate in the Strait of Hormuz.
Oil prices rallied on Monday, following President Donald Trump's statement that Iran's response to a US proposal was 'unacceptable,' raising supply fears and keeping the global market tight due to ongoing disruptions in the Strait of Hormuz.
Brent crude futures increased by $4.04 or 3.99 percent to $105.33 per barrel at 09:14 a.m. Saudi time, while US West Texas Intermediate rose by $4.43 or 4.64 percent to $99.85 per barrel.
Last week, both benchmarks experienced a 6 percent decline in weekly losses, reflecting hopes for an end to the conflict that has impeded oil transit through the Strait of Hormuz for ten weeks.
The ongoing geopolitical tensions continue to dominate market sentiment, with prices fluctuating based on developments between the US and Iran.
Trump is scheduled to visit China this week, where he plans to discuss Iran among other topics with Chinese President Xi Jinping.
This upcoming meeting has drawn attention from market analysts, who hope that Trump can persuade Beijing to influence Iran towards a ceasefire and resolution of the ongoing disruptions in the Strait of Hormuz.
The global oil market has faced significant challenges over the past two months, resulting in approximately 1 billion barrels lost.
Even if oil flows resume, it may take time for energy markets to stabilize, according to Saudi Aramco CEO Amin Nasser.
The recent trend of securing Middle East oil exports through alternative routes, despite Iranian attacks, is expected to persist.
Analysts from ING suggest that even if the acute oil shock subsides by late 2026, the ongoing risk of renewed disruption in the Strait of Hormuz, coupled with depleted inventories and weak policy coordination, will continue to embed a geopolitical risk premium into prices.
They anticipate Brent crude to remain above $90 per barrel through 2026 and around $80 to $85 per barrel into 2027 as demand growth resumes and inventories are gradually rebuilt.
The impact of supply disruptions is also evident in China's oil imports, which fell to the lowest level in almost four years in April.
This decline highlights the broader consequences of the ongoing tensions on global oil markets.
Brent crude futures increased by $4.04 or 3.99 percent to $105.33 per barrel at 09:14 a.m. Saudi time, while US West Texas Intermediate rose by $4.43 or 4.64 percent to $99.85 per barrel.
Last week, both benchmarks experienced a 6 percent decline in weekly losses, reflecting hopes for an end to the conflict that has impeded oil transit through the Strait of Hormuz for ten weeks.
The ongoing geopolitical tensions continue to dominate market sentiment, with prices fluctuating based on developments between the US and Iran.
Trump is scheduled to visit China this week, where he plans to discuss Iran among other topics with Chinese President Xi Jinping.
This upcoming meeting has drawn attention from market analysts, who hope that Trump can persuade Beijing to influence Iran towards a ceasefire and resolution of the ongoing disruptions in the Strait of Hormuz.
The global oil market has faced significant challenges over the past two months, resulting in approximately 1 billion barrels lost.
Even if oil flows resume, it may take time for energy markets to stabilize, according to Saudi Aramco CEO Amin Nasser.
The recent trend of securing Middle East oil exports through alternative routes, despite Iranian attacks, is expected to persist.
Analysts from ING suggest that even if the acute oil shock subsides by late 2026, the ongoing risk of renewed disruption in the Strait of Hormuz, coupled with depleted inventories and weak policy coordination, will continue to embed a geopolitical risk premium into prices.
They anticipate Brent crude to remain above $90 per barrel through 2026 and around $80 to $85 per barrel into 2027 as demand growth resumes and inventories are gradually rebuilt.
The impact of supply disruptions is also evident in China's oil imports, which fell to the lowest level in almost four years in April.
This decline highlights the broader consequences of the ongoing tensions on global oil markets.
