Oil back above $100 as US to blockade Iranian ports after peace talks fail
Asian energy markets saw oil prices climb above $100 per barrel on Monday, driven by renewed activity following the collapse of weekend negotiations between the United States and Iran. The US has announced plans to implement a port blockade, signaling continued tensions in the region. Global benchmark Brent crude increased by 7.3% to $102.30 (£76.32), while West Texas Intermediate rose 8.7% to $104.94.
The stalled talks have reignited fears that the ongoing energy crisis could intensify. Prices had previously dipped below $100 after a conditional two-week ceasefire was agreed between Washington and Tehran, which included the reopening of the Strait of Hormuz. This critical waterway, through which approximately 20% of global energy trade flows, has become a central point of contention since Iran threatened to target vessels using it in retaliation for US-Israeli strikes.
Shipments through the strait have been nearly halted since the conflict began on 28 February. While countries like India and Malaysia secured safe passage for their vessels, the disruption has caused prices to spike worldwide. Analysts had been monitoring the talks for potential relief, with Chua Yeow Hwee of Singapore’s Nanyang Technological University noting, “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.”
Major Asian stock indices dipped on Monday, with the Nikkei 225 in Japan falling 0.7% and South Korea’s Kospi losing 1%. The region has been disproportionately affected by the war’s consequences due to its reliance on Middle Eastern oil. US stock futures also hinted at a weaker start for Wall Street, reflecting investor uncertainty.
Centcom confirmed the blockade will begin at 10:00 ET (14:00 GMT) on Monday, targeting vessels entering or exiting Iranian ports. The measure will apply “impartially against all nations,” according to Centcom’s social media post. However, ships heading to non-Iranian ports in the strait will not face restrictions. This action follows President Trump’s statement on Truth Social, declaring the US would “BLOCKADING any and all ships trying to enter, or leave, the Strait of Hormuz.”
“The truth is, oil prices are not as high as they normally would be” given the scale of supply disruptions, said Saul Kavonic of MST Marquee. “But if that doesn’t happen, oil prices will head higher.”
Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, who represented the country in talks in Pakistan, asserted, “We will not submit to any threat.” The Islamic Revolutionary Guard Corps (IRGC) Naval Forces added that any military vessels approaching the strait would be deemed to have violated the US-Iran ceasefire and “dealt with severely.” The situation remains volatile as the conflict’s trajectory continues to shape global markets.
