FINWIRES · TerminalLIVE
FINWIRES

US Oil Update: Futures Rally on Conflicting Signals Over Iran Peace Talks

By

Crude oil futures rose by more than 5% in after-hours trading on Monday as markets weighed reports about Iran's suspension of peace talks with the US, stoking fears of prolonged supply disruption, even as President Trump claimed that the negotiations were ongoing.

Front-month West Texas Intermediate crude futures advanced 5.85% to $92.47 per barrel, and Brent futures were up 4.69% to $95.39/bbl.

Saxo Bank strategists said crude prices rebounded from a six-week low amid ongoing uncertainty over the prospects for a peace deal to end the war with Iran.

On Monday, Iran reportedly said it would suspend indirect communications with the US, and its allied "Resistance Front" was reported to be planning to completely block the Strait of Hormuz and choke other waterways, including the Bab el-Mandeb Strait.

However, President Donald Trump pushed back on those reports, saying talks were still ongoing.

"Talks are continuing, at a rapid pace, with the Islamic Republic of Iran," Trump posted on Truth Social.

Earlier in the day, the US President said he was not informed in advance of Iran's decision to halt negotiations and, in phone interviews with US media, dismissed concerns about the suspension.

"I really don't care. I couldn't care less," Trump reportedly told CNBC.

Foreign Minister Abbas Araghchi said that the truce agreement between the US and Iran applies to "all fronts, including in Lebanon," adding that a breach in one area constitutes a violation of the broader arrangement.

"The ceasefire between Iran and the US is unequivocally a ceasefire on all fronts, including in Lebanon," Araghchi said, adding that the US-Israeli alliance is responsible for the consequences of any violation.

Iran's Speaker of Parliament, Mohammad Baqer Ghalibaf, also said that the US naval blockade of Iranian ports and Israel's renewed attacks in Lebanon will come at a price for Washington and Tel Aviv.

The naval blockade and escalation of war crimes in Lebanon by the genocidal Zionist regime are clear evidence of US noncompliance with the ceasefire, Ghalibaf said in a social media post on X.

Scotiabank strategists said a prolonged geopolitical conflict involving Iran would tighten global oil markets and generate significant supply disruptions.

On the supply side, US crude stockpiles are expected to drop by about 6.2 million barrels in the week ended May 29, Macquarie strategists said in a weekly note on Monday, following a 3.3-mmbbl draw the previous week.

Macquarie analysts projected that domestic supply remained flat on a nominal basis, while stocks in the Strategic Petroleum Reserve are estimated to decrease by 8 million bbls.

Related Articles

Oil & Energy

Commodity Boom May Cushion Canada's Economy Amid Rising Oil Prices, Scotiabank Says

Oil prices climbed about $3 per barrel at the start of the week as military tensions between the US and Iran intensified and conflict in the Middle East broadened, Scotiabank strategists said in a Monday note.Analysts said both WTI and Brent crude advanced after the US and Iran exchanged attacks, while Israel expanded military operations in Lebanon, reducing the likelihood of a diplomatic breakthrough.Iran continues to resist demands related to uranium enrichment and control of the Strait of Hormuz, keeping energy markets focused on the risk of supply disruption.A broad commodity rally could support Canada's economy because stronger export prices typically boost national income and economic activity over time.Commodity-producing economies rarely enter recession during periods of widespread strength in resource markets, although positive effects often emerge with a delay.Rising commodity prices could contribute to stronger growth and inflation, factors the Bank of Canada is expected to monitor closely as it assesses future policy decisions.Strategists continue to expect Bank of Canada rate increases later this year, though they now see policymakers delaying tightening until September or later, then extending moves into Q4.Scotiabank previously projected 50 basis points of tightening in the third quarter and another 25 basis points in Q4 before rates reached 3%, but it now favors a later timeline.

Oil & Energy

Market Chatter: Strait of Hormuz Tolls Won't be Allowed, Dynacom Shipowner Says

Greece's Dynacom Tankers Management, one of the few oil tanker owners to continue transiting the Strait of Hormuz during the US-Israel-Iran conflict, rejected the idea of transit tolls in the waterway, saying it would not be accepted, Bloomberg reported on Monday."Nobody will allow tolls that are imposed in straits," George Procopiou, founder of Dynacom Tankers Management, reportedly said at the Capital Link Maritime Leaders Summit in Athens.Procopiou was speaking during the event, held alongside Greece's Posidonia shipping gathering."The freedom of navigation is essential and nobody can impose tolls or any other burden because there are many chokepoints in the world," Procopiou reportedly said.Tehran has argued that such charges are necessary to fund reconstruction following military strikes by US and Israeli forces.The proposal has been rejected by the Trump administration, while the International Maritime Organization has said such tolling would be illegal. The dispute has contributed to persistently reduced traffic through the strait, which remains well below pre-war levels.The Iran conflict has triggered severe disruption to global oil flows, leaving hundreds of tankers trapped inside the Persian Gulf while others waited outside the region in hopes the conflict would subside.Dynacom manages 73 crude and clean oil product carriers, with 54 additional vessels on order and a workforce of 5,500 seafarers.Shortly after the conflict began, tanker day rates spiked above $600,000, Bloomberg said, citing the Baltic Exchange in London, many times higher than pre-conflict levels. The surge lifted profits across the shipping sector but also sharply increased transportation costs for the broader oil industry.While most owners avoided sending vessels through the Strait of Hormuz due to security risks linked to Iran's military, Dynacom continued operations in the waterway and reportedly drew industry attention for doing so.The company sent at least eight oil tankers through the strait during the conflict, more than any other independent owner, Bloomberg said, citing its vessel tracking analysis.Procopiou praised crews operating on vessels that transit the region but provided limited detail on the procedures used to ensure safe passage."[They are] dedicated, they have strong ties to the company, and they have tried to assist and prove that we are reliable counterparties not only on good times, but in bad times as well," he said of the crews serving on ships that continued transiting Hormuz.Procopiou added that President Trump has been "good news" for shipping, "Trump is doing his best for the world but in parallel he's doing the best for shipping."Dynacom Tankers Management did not immediately respond to' request for comment.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Oil & Energy

UK Watchdog Says No Evidence Retailers Exploited Middle East Fuel Shock

The UK's Competition and Markets Authority said Monday that sustained high fuel prices at the pump are being driven primarily by elevated wholesale costs, but warned that weak competition in the retail fuel market continues to leave motorists paying more than necessary.The CMA, in its latest road fuel monitoring update, said higher pump prices seen through March and into April 2026 were largely driven by rising wholesale costs linked to geopolitical disruption, rather than by any change in retailers' pricing behavior.The watchdog said fuel retail margins, the difference between wholesale costs and pump prices, remained historically elevated, averaging about 11.3 pence per liter in April, even as some supply conditions stabilized.Though a small number of retailers saw margin increases in March, the CMA said this appeared to reflect competitive "follow-the-leader" pricing, inventory pressures and differing wholesale purchase costs rather than deliberate exploitation of the crisis.There is no evidence that retailers altered their pricing strategies to take advantage of the crisis, the regulator said, adding that broader market conditions, including volatility and supply constraints, may have reduced incentives for aggressive price competition.However, the CMA reiterated concerns over "weak competitive dynamics" in the UK fuel market, first identified in its 2023 review, saying many retailers continue to set prices passively by matching local competitors rather than competing to attract customers.The CMA said supermarkets remained the cheapest place to buy fuel on average, while motorway service stations continued to charge a significant premium.It also highlighted the potential benefits of price comparison tools under its Fuel Finder initiative, saying drivers could save up to 9 British Pounds ($12.11) per tank by shopping around.Retailers should be in no doubt that we are continuing to monitor prices and margins closely, Sarah Cardell, chief executive of CMA, said, adding that any reductions in wholesale costs should be "rapidly and fully passed on" to consumers.The regulator said it would closely monitor whether improved supply conditions in April are reflected in lower retail prices in the coming weeks.The antitrust watchdog plans to publish its next update in August, covering market developments through the end of June, and will also conduct a deeper review of retailer pricing strategies, with findings expected in the autumn as part of an assessment of the Fuel Finder scheme's impact.