Oil prices climbed as prospects for a swift reopening of the Strait of Hormuz dimmed following Iran’s refusal to relax conditions for resuming navigation through the strategic waterway. The announcement came after U.S. President Donald Trump rejected Tehran’s proposal, dampening hopes for the immediate restoration of traffic.
On Monday, Brent crude rose to approximately $107 per barrel, while West Texas Intermediate (WTI) surpassed $94. Trump told Axios in an interview that Iran’s demands resembled terms Washington might have accepted about a year ago, but he accused Tehran of overplaying its hand. He also indicated that negotiations between the two countries are expected to resume later this week.
Despite the price increase, analysts expect gains to be limited. Suvro Sarkar, head of energy research at DBS Bank Ltd., noted that the market did not anticipate the waterway would reopen within a week and suggested the latest developments would not significantly alter supply conditions. Last week, crude prices fluctuated amid mixed signals regarding talks to resolve the standoff, gradual restoration of Middle Eastern oil flows, and uncertainty over potential U.S. measures to address soaring diesel prices.
President Trump disclosed that the White House is seriously considering restrictions on diesel exports in response to record fuel costs. Brent crude has surged about 75% this year amid ongoing tensions between the United States and Iran, which entered their eighth month during the current conflict, contributing to global inflationary pressures.
The future of negotiations remains unclear. Officials familiar with the discussions have indicated that potential accords contemplated reopening the Strait of Hormuz in exchange for the lifting of a U.S. blockade on Iranian ports. Such a deal would have resembled a memorandum of understanding reached in mid-June, which briefly led to a fragile ceasefire before collapsing.
Meanwhile, U.S. Treasury Secretary Scott Bessent said on Fox News that Iran is likely to make its final deliveries of oil to China within two weeks, reflecting a significant scaling back of Beijing’s support. Only about 15 million barrels of Iranian crude remain in transit, intensifying pressure on Tehran to reach an arrangement.
Market participants continue to monitor physical crude flows through the Strait of Hormuz, which previously transported roughly one-fifth of the world’s oil and liquefied natural gas before the outbreak of hostilities. Trump mentioned that a “record amount” of oil passed through the strait on Saturday night. Separately, Iran’s Fars news agency reported that Iranian forces struck vessels following unauthorized routes in the waterway.
Tensions persist across the Middle East. On Saturday, the Saudi-led coalition in Yemen reported that its air defenses intercepted Houthi drones inbound for Riyadh and a missile aimed at Khamis Mushait in southern Saudi Arabia, underscoring ongoing regional instability.