Oil prices rise as US-Iran peace talks stall

Asian oil markets saw a price increase on Monday morning following the suspension of renewed peace discussions between the US and Iran. Brent crude, the global benchmark, climbed by 1% to $106.50 (£78.66) per barrel, while US-traded crude gained 1% to $95.40. This development comes after US President Donald Trump announced the cancellation of a planned team deployment to Pakistan for talks with Iranian officials.

The Strait of Hormuz, a vital maritime route for global energy supplies, has remained a focal point of tension. Iran’s threats to block the waterway, in response to US and Israeli airstrikes, have kept pressure on oil markets. Iranian Foreign Minister Seyed Abbas Araghchi noted ongoing “important discussions” with Oman, emphasizing efforts to secure safe passage for trade. He shared:

“Our focus included ways to ensure safe transit that is to benefit all dear neighbors and the world. Our neighbors are our priority.”

Araghchi arrived in St Petersburg on Monday to engage with Russian President Vladimir Putin, as reported by Iran’s state news agency Irna.

Approximately 20% of the world’s crude oil and liquified natural gas (LNG) typically transits through the Strait of Hormuz. The closure of this route has significantly impacted global supply chains. Meanwhile, Brent crude has surged over 10% since Trump extended a ceasefire with Tehran, offering leadership a chance to submit a “unified proposal.”

Asian stock indexes continued their upward trend, with some reaching record highs. Japan’s Nikkei 225 index rose 1.5% on Monday, following a 12% gain in the prior month. South Korea’s Kospi also increased by 2.3% on the day, after climbing more than 20% over the last month. However, initial volatility hit Japanese and South Korean markets hard, as both economies depend heavily on energy imports from the Gulf.

Economics lecturer Goh Jing Rong from Singapore Management University highlighted that traders are less responsive to recent news, awaiting “credible” signs of conflict easing. “I think traders want concrete evidence rather than just a fragile and reversible ceasefire agreement,” Goh stated. Trump’s recent social media post criticized the “too much time wasted on travelling” and “too much work” in sending representatives to Islamabad, citing internal “tremendous infighting and confusion” within Tehran’s leadership. He added:

“Nobody knows who is in charge, including them. Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”