Global oil markets surged on Monday after Iran reportedly suspended negotiations with the United States, raising concerns that efforts to ease tensions in the Middle East may be losing momentum. The development reignited fears of prolonged disruptions to energy supplies, sending crude prices sharply higher and weighing on investor sentiment across major stock markets.
Oil futures rose by more than five per cent after Iranian media reported that Tehran had halted indirect talks with Washington. According to reports, Iranian officials linked the decision to the collapse of ceasefire arrangements and escalating clashes involving Israel and Hezbollah in Lebanon.
The latest setback comes after a series of military exchanges between the United States and Iran over the weekend. Tehran has maintained that any comprehensive agreement aimed at ending hostilities must also address Israel’s expanding military operations in Lebanon.
Energy traders reacted swiftly to the news, particularly as uncertainty continues to surround the Strait of Hormuz, a critical maritime route that normally carries roughly one-fifth of global oil and liquefied natural gas shipments. Although a ceasefire has largely held since mid-April, shipping activity through the strategic waterway remains limited, keeping supply concerns alive.
By midday trading, Brent crude had climbed nearly 5 per cent to $95.60 per barrel, while US benchmark West Texas Intermediate (WTI) advanced almost 6 per cent to $92.55 per barrel.
The surge in energy prices reversed early optimism in equity markets. Major US indexes moved into negative territory, with the Dow Jones Industrial Average, S&P 500, and Nasdaq all posting losses as investors weighed the economic impact of higher fuel costs and ongoing geopolitical risks.
Despite broader market weakness, technology stocks received support from fresh developments in the artificial intelligence sector. Nvidia shares rose more than 4 per cent after the company unveiled a new AI-focused processor designed for next-generation Windows-based personal computers. The announcement helped fuel gains in Asian technology markets, with South Korea’s Samsung Electronics posting strong advances and chipmaker SK hynix also recording gains.
Analysts noted that investor enthusiasm surrounding artificial intelligence continues to provide support for global equities. However, concerns over rising energy prices, inflationary pressures, and the risk of a prolonged Middle East conflict remain key challenges for financial markets.
The US dollar strengthened against major currencies, while investors continued to monitor diplomatic developments closely, viewing any progress in negotiations as crucial to stabilising both energy markets and the broader global economy.
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