-- Crude oil futures climbed in after-hours trading on Monday as peace talks between the US and Iran stalled and shipments through the Strait of Hormuz remained severely limited, keeping global supplies tight.
Front-month West Texas Intermediate crude futures gained 2.22% to $96.52 per barrel, while Brent futures were up 2.68% to $108.11/bbl.
The world is living on borrowed barrels and on borrowed time until the Strait of Hormuz reopens, Bjarne Schieldrop, chief commodities analyst at SEB Research, said, adding that the June contract is up as tentative US-Iran talks faltered to nothing this weekend.
US officials are discussing a new Iranian proposal on resolving the war with Tehran, the White House said Monday, as the conflict remains in a stalemate with energy supplies from the region reduced.
White House Press Secretary Karoline Leavitt reportedly said that President Trump had convened a meeting of national security officials earlier in the day to discuss the Iranian proposal.
She said Trump's "red lines with respect to Iran have been made very, very clear," adding that Trump would address the matter "very soon."
The US Treasury Department also said on Monday that Washington will sanction any country conducting business with sanctioned Iranian airlines, including the provision of jet fuel.
"The Treasury will impose maximum pressure on Iran and will not hesitate to act against any third parties that facilitate or conduct business with Iranian entities," the Treasury said in a social media post on X.
Meanwhile, Iran's Foreign Minister Seyed Abbas Araghchi also said that Tehran was reviewing President Trump's request for negotiations, according to media reports.
ING strategists said the lack of progress means the market is tightening every day, requiring oil prices to reprice higher, as there is little alternative to fill the about 13 million b/d shortfall.
Araghchi also met Russian President Vladimir Putin in Moscow on Monday to discuss the conflict as negotiations between the sides appear to have stalled.
Putin reportedly told Araghchi that Russia would "do everything that serves your interests, the interests of all the people of the region, so that peace can be achieved as soon as possible".
The US and Iran have mostly observed a ceasefire since early April, but the double blockade of the Hormuz has ground vessel traffic through the strategic waterway to near zero.
Saxo Bank strategists said crude is set to grind higher as Hormuz remains effectively closed, extending disruptions across the Middle East and tightening the availability of critical commodities.
"Brent crude trades at a three-week high as efforts to revive peace talks have stalled, with an Iranian proposal reportedly calling for nuclear negotiations to be postponed to a later stage," Saxo Bank analysts said.