-- Crude oil futures climbed in midday trading on Monday as efforts to resume US-Iran peace talks appear to have stalled, with escalating tensions over the Strait of Hormuz keeping prices elevated.
Front-month West Texas Intermediate crude futures gained 2.31% to $96.58 per barrel, while Brent futures were up 3.28% to $108.85/bbl.
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.
On Monday, Iran's Foreign Minister Abbas Araqchi reportedly said that Tehran was reviewing President Trump's request for negotiations. Araghchi also met Russian President Vladimir Putin in Moscow on Monday to discuss the conflict as negotiations between the sides appear to have stalled.
His visit follows a weekend of talks in Pakistan and Oman, which have both acted as mediators in the negotiations between Tehran and Washington.
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".
"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.
Meanwhile, Trump canceled a planned trip by US peace envoy Steve Witkoff and Jared Kushner to Pakistan as the Iranian leadership reiterates that Tehran won't negotiate if it's being threatened. President Masoud Pezeshkian said his country won't enter "imposed negotiations under threats or blockade," according to media reports.
ING strategists said the lack of progress means the market is tightening every day, requiring oil prices to reprice at higher levels, as there is little alternative to fill about 13 million b/d of the shortfall.
The US-Israeli alliance 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.
"With US sanctions tightening and military interceptions continuing, markets remain highly sensitive to any signs of diplomatic progress or further escalation," Soojin Kim, research analyst at MUFG, said.
Over the weekend, the US Central Command said its forces were continuing to implement the blockade, preventing vessels from entering or leaving Iranian waters. "American forces have directed 38 ships to turn around, or return to port," Centcom said in a post on X Sunday.