Oil Prices Rise as US-Iran Peace Talks Stall, Strait of Hormuz Tensions Grow

Oil prices rose as plans for a second round of peace talks between the US and Iran stalled again, with Brent crude climbing by nearly 2% to $107.26 (£79.13) a barrel on Monday, according to the BBC.

“Oil prices have climbed higher amid stalled peace talks between the United States and Iran”

Al Jazeera

The BBC said US President Donald Trump had cancelled plans to send a team to Pakistan for negotiations with their Iranian counterparts, and it linked the market pressure to the conflict’s impact on the Strait of Hormuz.

Al Jazeera

The BBC reported that around a fifth of the world’s crude oil and liquified natural gas (LNG) usually passes through the strait, and it quoted Sophie Huynh of BNP Paribas warning that the closure could affect “everything from ‘bin bags to medicine’.”

The BBC also said Iranian Foreign Minister Seyed Abbas Araghchi told reporters that “important discussions on bilateral matters and regional developments” were ongoing with Oman, and it included his social media line about safe transit: “Our focus included ways to ensure safe transit that is to benefit all dear neighbors and the world. Our neighbors are our priority.”

Reuters and other outlets described the same stalling talks as keeping geopolitical pressure on global energy markets, with Quartz reporting that Brent crude climbed back to $107 a barrel and West Texas Intermediate rose to almost $96 a barrel.

Al Jazeera similarly reported that Brent crude rose more than 2% on Sunday after hopes for a second round of ceasefire negotiations between Washington and Tehran unravelled over the weekend, and it said Brent stood at $106.99 as of 1:30 GMT.

The diplomatic deadlock centered on Trump’s decision to scrap a planned trip by US envoys to Pakistan for ceasefire negotiations with Iran, a move multiple outlets tied directly to market jitters.

The BBC said Trump cancelled plans to send a team to Pakistan for negotiations with their Iranian counterparts, and it quoted his Truth Social message that there was “too much time wasted on travelling” and “too much work” in sending US representatives to Islamabad.

AP News

In the same post, Trump said, “there is tremendous infighting and confusion” within Tehran’s leadership, adding, “Nobody knows who is in charge, including them,” and “Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”

Quartz reported that Trump scrapped plans to dispatch special envoy Steve Witkoff and Jared Kushner to Islamabad for ceasefire negotiations, and it said the talks could instead take place by phone.

Al Jazeera added that Trump cancelled the planned trip after Iranian Foreign Affairs Abbas Araghchi departed Islamabad before any direct engagement could take place between the sides, and it said Araghchi arrived in Russia’s Saint Petersburg on Monday for talks with Russian President Vladimir Putin.

AP’s live updates described Iran’s counter-offer as conditional, saying Iran offered to reopen the Strait of Hormuz if the US lifts its blockade and the war ends, with discussions on the nuclear program to come later.

As the US-Iran talks stalled, Iranian diplomacy moved through Oman and Russia, with Araghchi’s travel described as part of an effort to keep channels open.

“Oil prices have risen after plans for a second round of peace talks between the US and Iran stalled again”

BBC

The BBC said Araghchi arrived in St Petersburg on Monday “with the aim of meeting and holding talks with Russian President Vladimir Putin,” citing Iranian state-run news agency Irna.

It also said Araghchi had told reporters that “important discussions on bilateral matters and regional developments” were ongoing with Oman, and it included his social media statement about safe transit that “Our neighbors are our priority.”

AP’s live updates said Araghchi met on Sunday with the Sultan of Oman, Haitham bin Tariq Al Said, in Muscat, and it said Oman’s foreign minister, Badr al Busaidi, also attended.

AP reported that under Iran’s proposal, discussions on the larger question of its nuclear program would come later, and it said Trump seemed unlikely to accept the offer.

The Toronto Star described the proposal in more detail, saying Iran offered to end its chokehold on the Strait of Hormuz without addressing its nuclear program, while also wanting the United States to end its blockade of the country, and it said the new proposal was passed onto the US by Pakistan.

Multiple reports tied the stalled diplomacy to ongoing pressure around the Strait of Hormuz, including claims about seizures and the practical impact on shipping.

The BBC said global energy supplies have been under intense pressure since the start of the Iran war as the crucial Strait of Hormuz waterway has been effectively closed by the conflict.

CNBC

Al Jazeera said Tehran’s threats against commercial shipping in the Strait of Hormuz continue to constrain traffic, paralysing a sizeable portion of the world’s supply of oil and natural gas, and it cited Windward for 19 commercial vessels transiting on Saturday versus an average of 129 daily transits before the war.

Quartz added a new flashpoint, saying seizures of two container ships by Iran's Islamic Revolutionary Guard Corps near the Strait of Hormuz added to an already volatile region.

AP’s live updates described the existing ceasefire as keeping the US and Iran in a fragile standoff over the strait, and it said Iran offered to reopen the strait if the US lifts its blockade and the war ends.

The Toronto Star reported that the US military’s Central Command said it has so far turned around 38 ships during the blockade, and it linked the blockade to rerouted food imports via the Caspian Sea.

Beyond markets and shipping, the sources also described the human toll of the Iran war and the knock-on political and economic measures.

AP’s live updates said, “Since the war began, at least 3,375 people have been killed in Iran and at least 2,509 people in Lebanon,” and it added that “Also, 23 people have been killed in Israel and more than a dozen in Gulf Arab states.”

Forbes

It further listed that “Fifteen Israeli soldiers in Lebanon, 13 U.S. service members in the region and six U.N. peacekeepers in southern Lebanon have been killed.”

The Toronto Star repeated the same casualty totals and then moved to sanctions and consumer impacts, reporting that China opposed a US decision to sanction Hengli Petrochemicals in China’s northeastern port city of Dalian for purchasing Iranian crude oil shipments.

It quoted China’s Ministry of Foreign Affairs spokesperson Lin Jian saying, “China always opposes illegal unilateral sanctions that lack a basis in international law and urges the U.S. to stop its wrong practices of abusing sanctions and exercising long-arm jurisdiction,” and it said “We will firmly safeguard the legitimate rights and interests of Chinese companies,” Lin said.

CNBC’s market framing added that Goldman Sachs expected oil prices to stay higher for longer, raising its Brent forecast to $90 a barrel by late 2026 from $80 previously, and it said Invesco estimates $80 per barrel is likely a floor for Brent this year absent a full normalization of flows.