-- West Texas Intermediate (WTI) crude oil closed higher Monday as talks expected to be held over the weekend between the United States and Iran in Pakistan didn't happen, even as Iran offered to reopen the Strait of Hormuz in return for it being allowed to continue its nuclear program and the U.S. ending the blockade of its ports.
WTI oil for June delivery closed up US$1.97 to settle at US$96.37 per barrel, while June Brent oil was last seen up US$3.13 to US$108.46.
Iran closed the Strait of Hormuz after the United States and Israel launched attacks on the country on Feb. 28. The Strait is the chokepoint for 20% of daily global oil demand supplied by Persian Gulf nations and its closure has produced the largest-ever supply shock, pushing up oil prices by 41% since the start of the war.
Talks expected to be staged in Islamabad over the weekend were cancelled as negotiators failed to turn up, though a ceasefire held as the war enters its third month.
"With face to face negotiations failing to materialize in Islamabad despite the market hour headlines pointing to progress in the talks, it seems that neither side feels sufficient pressure to make serious concessions. For eight weeks, the White House has been exceedingly successful in deploying the "over soon" message to keep a lid on front month prices," Helima Croft, Head of Global Commodity Strategy and MENA Research at RBC Capital Markets, wrote.
The Guardian on Monday reported Iran is offering to end its chokehold on the Strait in return for an end to the U.S. blockade, and without addressing concerns around its nuclear program, which U.S. President Trump has made a key demand for ending the war. The paper said the proposal was passed to the United States by Pakistan.