Oil prices have climbed back above $100 a barrel after failed negotiations between the United States and Iran heightened fears of further disruptions to global energy supplies.
The rebound follows the collapse of weekend talks and a declaration by Donald Trump that the US would move to blockade Iranian ports, escalating tensions in the region.
Global benchmark Brent crude rose by over 7% to trade above $102 per barrel, while US benchmark West Texas Intermediate gained nearly 9% to exceed $104.
The developments have reignited concerns over the stability of the global energy market, particularly as the Strait of Hormuz remains a critical route for oil shipments.
Approximately one-fifth of the world’s oil supply passes through the narrow waterway, making it a key flashpoint in the ongoing conflict.
Energy markets had briefly stabilised last week after Washington and Tehran agreed to a conditional two-week ceasefire, which included reopening the strait. However, the latest breakdown in diplomacy has reversed those gains.
Shipping activity in the region has largely stalled since the conflict began in late February, although some countries have managed to negotiate limited safe passage for their vessels.
Analysts warn that prices could remain elevated or rise further depending on how the situation unfolds. Uncertainty around the implementation of the proposed blockade and the possibility of renewed diplomatic efforts continue to influence market expectations.
Meanwhile, financial markets in Asia reacted negatively, with major indices slipping amid concerns over energy supply disruptions. Economies in the region remain particularly vulnerable due to their heavy reliance on Middle Eastern oil.
US military authorities have indicated that enforcement of the blockade would target vessels entering or leaving Iranian ports, while allowing transit through the Strait of Hormuz for ships not bound for Iran.
Iranian officials have responded defiantly, warning against any military escalation and signalling that they will not yield to external pressure.
The latest developments underscore the volatility in global energy markets, with oil prices expected to fluctuate sharply as investors monitor the evolving geopolitical situation.
[BBC News]
