NEW YORK: Oil prices were up about USD5 a barrel on Monday after Iran’s Tasnim news agency reported that Tehran is halting indirect negotiations with the US and plans are being made for Iranian forces and their allies to completely block the Strait of Hormuz and take action elsewhere, including another key shipping route.
Iran and the US traded strikes in recent days and Israel ordered troops to move further into Lebanon in its battle with the Tehran-backed Hezbollah militant group.
Brent crude futures were up USD4.80, or 5.2 percent to USD95.92 a barrel at 1:17 p.m. EDT (1717 GMT) while US crude futures rose USD5.46, or 6.2 percent, to USD92.82 a barrel.
READ MORE: Oil jumps over $6 on Iran report of halted U.S.-Tehran exchanges, Hormuz blockade risk
Both benchmarks pared gains after US President Donald Trump shrugged off the suspension of indirect talks with Iran in an interview with CNBC on Monday, saying he did not care if they were over.
Brent and WTI fell around 19 percent and 17 percent, respectively, last month, marking both contracts’ biggest monthly drops in absolute terms since March 2020, when the COVID-19 pandemic slashed energy demand.
Iranian state TV said separately on Monday that a ceasefire agreed between Iran and the US in early April is very likely to end if Israel continues to attack Hezbollah. Esmaeil Baghaei, spokesperson for Iran’s foreign ministry, said the delay in the diplomatic process to end the war can be explained by a lack of trust, Washington’s contradictory positions and Israel’s attacks on Lebanon.
“It just seems that both sides are in different worlds,” said Andrew Lipow, president of Lipow Oil Associates.
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