Oil prices surged by $3 a barrel on Monday after the United States and Iran failed to reach an agreement on a U.S.-drafted peace proposal, leaving the Strait of Hormuz largely closed and maintaining tight global energy supplies.
Brent and WTI Prices Climb
Brent crude futures rose $3.18, or 3.14%, to $104.47 per barrel by 2336 GMT, extending Friday's 1.23% gain. U.S. West Texas Intermediate crude increased by $3.09, or 3.24%, to $98.51 a barrel, following a 0.64% rise in the previous session.
Peace Hopes Dashed
Expectations for a swift end to the 10-week U.S.-Iran conflict, which would allow oil transit through the strategic Strait of Hormuz, were shattered after President Donald Trump on Sunday dismissed Iran's response to a U.S. proposal for peace talks as "unacceptable".
Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran, among other topics, with Chinese President Xi Jinping, according to U.S. officials.
Market Focus on Trump's China Visit
"Market attention now shifts squarely to President Trump's visit to China this week," said IG market analyst Tony Sycamore in a note. "There is hope he can persuade Beijing to leverage its influence over Iran to push for a comprehensive ceasefire and a resolution to the ongoing disruption in the Strait of Hormuz."
Global Oil Losses Mount
The world has lost approximately one billion barrels of oil over the past two months, and energy markets will take time to stabilize even if flows resume, Saudi Aramco CEO Amin Nasser stated on Sunday.
Data from Kpler shipping showed that two more tankers laden with crude exited the Strait of Hormuz last week with their trackers switched off to avoid Iranian attacks, highlighting a rising trend to sustain Middle East oil exports.
Reporting by Florence Tan; Editing by Edmund Klamann and Jamie Freed
