Oil prices jumped nearly 3% on Monday after Iran said it would not soften its conditions for reopening the Strait of Hormuz, following President Donald Trump's rejection of Tehran's proposal. The standoff has left the timeline for normal traffic through the crucial shipping route uncertain, while Houthi attacks on Saudi Arabia and record diesel prices add further strain to the market.
Oil climbed after Iran said it would not soften its terms for reopening the Strait of Hormuz, a day after Trump rejected Tehran's proposal to end the standoff. As of 02:43 ET (06:43 GMT), Brent Oil Futures expiring in November rose 2.8% to $107.27 per barrel, while WTI crude futures gained nearly 2% to $94.13 per barrel. Including Monday's gains, Brent futures were up 18% for the month.
Iran holds firm on reopening conditions
Iran's proposal would allow the Strait to reopen within seven days while broader negotiations resume, provided Washington lifts its naval blockade, eases military pressure, removes sanctions on Iranian oil sales and agrees to a ceasefire. Iran has said it remains committed to those conditions despite Trump's rejection.
Still, Trump has said he expects negotiations with Iran to resume this week, according to an Axios report, and Qatar has been shuttling between the two sides to revive talks. The Strait, through which about a fifth of global oil and liquefied natural gas supplies moved before the conflict began, has seen a sharp reduction in shipping activity. Even so, Trump said more than 20 million barrels had transited over the weekend, according to Axios.
Houthi attacks add to supply concerns
Adding to supply concerns, Iran-backed Houthi forces in Yemen have also stepped up attacks on Saudi Arabia and commercial shipping in the Red Sea. Saudi Arabia said it intercepted two ballistic missiles and two drones launched by the Houthis on Saturday, days after intercepting six missiles aimed toward Taif and the Yanbu area. The disruption has forced Gulf producers to seek alternative ways of moving crude oil.
Diesel prices hit record highs
The market is also watching refined-product supplies closely. Diesel prices in Europe and the U.S. reached record highs as disruptions to oil and product exports from the Middle East and Russia tightened fuel markets.
Source: Commodities & Futures News
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