Oil prices rise 6pc on fears of US-Iran ceasefire collapse

NEW YORK: Oil prices jumped around 6 percent in Monday trading on uncertainty over peace talks between the US and Iran after violence flared around the Strait of Hormuz.

Brent crude futures settled USD5.10, or 5.64 percent, higher to USD95.48 a barrel. US West Texas Intermediate advanced USD5.76, or 6.87 percent, at USD89.61.

Both contracts had tumbled by 9% on Friday for their largest daily declines since April 18 after Iran said that passage for all commercial vessels through the Strait of Hormuz was open for the remainder of the ceasefire.

Over the weekend, the US seized an Iranian cargo ship that tried to break through its blockade while Iran said it would retaliate, heightening fears of a resumption in hostilities.

READ MORE: Oil prices rise 5% on fears of US-Iran ceasefire collapse

“The goodwill that was generated on Friday has totally evaporated,” said Bob Yawger, director of energy futures at Mizuho.

With a two-week ceasefire set to expire later this week, the renewed hostilities cast doubts over prospects for a second round of talks between the US and Iran in Pakistan. Iran is considering attending the peace talks, a senior Iranian official told Reuters on Monday, but no decision had been made.

The Gulf nation’s Foreign Minister Abbas Araqchi told his Pakistani counterpart Ishaq Dar that the US “continued violations of the ceasefire” are a major obstacle to the continuation of the diplomatic process, an Iranian foreign ministry statement said on Monday.

Trump, asked over the weekend about the chance of a ceasefire extension, said: “I don’t know. Maybe not. Maybe I won’t extend it. But the blockade is going to remain.”