Oil prices surged on Monday as tensions between the United States and Iran escalated, pushing Brent crude above $104 per barrel amid fears of disruptions to global energy supplies.
The sharp rise followed remarks by Donald Trump, who rejected Iran’s proposed conditions for ending the ongoing Middle East conflict, calling Tehran’s response to Washington’s peace outline “totally unacceptable.”
Iran responded by demanding the release of its frozen assets and the removal of a US blockade affecting its ports, further reducing hopes for an immediate diplomatic breakthrough.
The growing deadlock intensified investor concerns over the security of oil shipments through the Strait of Hormuz, one of the world’s most important oil transit routes. Any disruption in the area could significantly affect global crude supplies and energy markets.
Brent North Sea crude settled 2.9 per cent higher at $104.21 per barrel after briefly surging more than four percent during the session. US benchmark West Texas Intermediate also climbed 2.8 per cent to close at $98.07 a barrel.
Kathleen Brooks, research director at XTB, said oil prices remain extremely sensitive to developments surrounding the Strait of Hormuz.
Despite the spike in energy prices, global equity markets largely remained stable. Analysts said investors appeared confident that the conflict would not immediately spiral into a broader disruption of global trade or oil supplies.
Wall Street’s three major indices ended modestly higher, while European markets showed mixed performances. In Asia, Shanghai and Seoul advanced strongly, supported by gains in technology shares and optimism surrounding artificial intelligence-related investments.
Market analysts also suggested that Trump is unlikely to pursue actions that could severely impact global oil flows ahead of his upcoming summit with Xi Jinping later this week.
The continuing uncertainty in the Middle East, however, is expected to keep oil markets volatile in the coming days as traders closely monitor diplomatic and military developments in the region.
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