Crude oil prices surged roughly 5% on Monday as uncertainty over negotiations between the United States and Iran raised concerns that the Strait of Hormuz could remain closed for an extended period. Brent crude settled up $4.17, or 4.99%, at $87.72 per barrel, while WTI gained $3.95, or 5.05%, to settle at $82.13 per barrel.
Market sentiment weakened after Iran said the reopening of the Strait of Hormuz would require the United States to lift sanctions, end military threats, and provide compensation for damages associated with the conflict. Iran also indicated that it is not currently engaged in direct negotiations with Washington, reducing expectations for a near-term agreement that would restore normal shipping through the waterway.
The uncertainty represents a significant risk to global energy supplies, as the Strait of Hormuz normally handles roughly one-fifth of global oil and liquefied natural gas shipments. A prolonged disruption would continue to tighten available supplies and increase pressure on commercial inventories worldwide.
Additional supply concerns came from continued attacks on energy infrastructure across the region and in Russia. Yemen’s Iran-aligned Houthi forces reported an attack on Saudi Aramco’s Jazan refinery, while Ukrainian strikes continued to target Russian refineries and petrochemical facilities.
The combination of stalled negotiations, continued attacks on energy infrastructure, and uncertainty surrounding the reopening of the Strait of Hormuz pushed crude prices sharply higher, with both Brent and WTI recording their largest daily percentage gains since July 29.