Oil prices hit two-week high as Iran talks stall

NEW YORK: Oil prices climbed about 3 percent to a two-week high on Monday as peace talks between the US and Iran stalled and shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.

Brent futures rose USD2.90, or 2.8 percent, to settle at USD108.23 a barrel, while US West Texas Intermediate crude rose USD1.97, or 2.1 percent, to settle at USD96.37.

That put Brent up for a sixth day in a row for the first time since March 2025 and at its highest close since April 7. WTI closed at its highest since April 13.

“Brent blowing out to a double-digit plus premium to WTI … should attract customers to the US Gulf of Mexico and possibly drive US crude oil exports to (a) new all-time record,” Bob Yawger, director of energy futures at Mizuho, said in a note.

READ MORE: Oil prices rise as US-Iran peace talks stall

US President Donald Trump discussed a new Iranian proposal on resolving the war with Tehran with his top national security aides, with the conflict currently in a stalemate and energy supplies from the region reduced.

“The diplomatic stand-off means that every day 10-13 million barrels of oil fail to get to the international market, worsening an already tight oil balance. Therefore, there is only one direction for oil prices to go,” said PVM Oil Associates analyst Tamas Varga. At least seven ships - mainly dry bulk vessels - have crossed the Strait of Hormuz in the past 24 hours, in line with muted activity in recent days. That represents a fraction of the average 140 daily passages before the Iran war began on February 28, when around 20 percent of global oil supplies passed through the strait.

In addition, six tankers loaded with Iranian oil have been forced back to Iran by the US blockade in recent days.

Russian President Vladimir Putin praised the Iranian people for battling to stay independent in the face of US and Israeli pressure and said Moscow would do all it could to help Tehran.

Inflation worries

The European Central Bank meets on Thursday, with an Iran war ceasefire easing the pressure on it for an immediate interest rate hike. But with the status of peace talks unclear and no sign of the Strait of Hormuz reopening soon, traders still anticipate high oil prices will boost inflation and force the bank to hike interest rates later this year.

Central banks like the ECB use interest rates to keep inflation in check. Higher interest rates increase consumer borrowing costs, which can reduce economic growth and oil demand.