-- Oil pushed back above the US$100 per barrel mark early Monday after the United States said it will blockade Iran's ports after weekend peace talks in Pakistan ended without an agreement to end hostilities.
West Texas Intermediate crude oil for May delivery was last seen up US$7.18 to US$103.75 per barrel, while June Brent oil rose US$7.00 to US$102.20.
Direct and indirect talks between Iran and the United States failed to reach an agreement, with Iran refusing to agree to U.S. demands that it end its uranium-enrichment program. In response to the unsuccessful negotiations, the United States said it will blockade Iran's ports and block any ships paying Iran for passage through the Strait of Hormuz. Iran responded by threatening attacks on ports in the Persian Gulf and Sea of Oman, according to the Wall Street Journal.
Failure to reach a peace deal leaves the Strait of Hormuz closed to tanker traffic, continuing to block 20% of daily oil demand supplied by Persian Gulf nations. The largest-ever supply shock likely to be magnified by the oncoming high-demand summer season.
"Once again, high stakes negotiations between the US and Iran deadlocked over Washington's zero uranium enrichment demand, setting the stage for further escalation in the 6-week war and prolonged supply disruptions in advance of summer driving season," Helima Croft, Head of Global Commodity Strategy and MENA Research at RBC Capital Markets, wrote.
"In the absence of a negotiated deal, the White House is essentially left with the option of a strategic retreat that would leave Iran with de facto control over the Strait or a military escalation aimed at
eliminating the Tehran tollbooth."