ANNIE ALLEN (UK Bureau Chief)
Global oil prices surged sharply on Monday, climbing nearly 3% as stalled negotiations between the United States and Iran and restricted flows through the Strait of Hormuz tightened already strained global supplies.
Brent crude rose $3, or about 2.9%, to $108.36 per barrel by 0828 GMT, its highest level in three weeks. U.S. West Texas Intermediate (WTI) gained $2.45, or 2.6%, to $96.85.
The price rally follows a collapse in momentum over peace efforts, after Donald Trump said Iran could make contact if it wished to negotiate an end to the two-month conflict, signalling no immediate breakthrough.
Meanwhile, Abbas Araqchi continued diplomatic engagements across Pakistan, Oman and Russia, but both sides remain far apart on key issues, including Iran’s nuclear programme and access through the Gulf’s critical shipping lanes.
Shipping disruptions are now at the centre of the market reaction. Tehran has largely restricted passage through the Strait of Hormuz, while Washington has imposed a blockade on Iranian ports, sharply limiting tanker movements.
Data from shipping analytics firm Kpler showed that only one oil products tanker entered the Gulf on Sunday, underscoring the scale of the disruption.
Analysts estimate that between 10 million and 13 million barrels of oil per day are being withheld from international markets, worsening an already tight supply balance.
“The diplomatic stand-off means supply losses are mounting daily, leaving prices with only one direction,” said Tamas Varga of PVM Oil Associates.
Goldman Sachs raised its fourth-quarter outlook, projecting Brent crude at $90 per barrel and WTI at $83, citing reduced Middle East output and heightened risks to supply.
The bank warned that the broader economic impact could exceed expectations, pointing to rising refined product prices, potential shortages and what it described as the “unprecedented scale” of the disruption.
With negotiations stalled and supply routes constrained, oil markets are entering a volatile phase, as geopolitical tensions continue to dictate price movements.
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