Oil prices rose sharply Monday as tensions flared again in the Middle East following Iran's closure of the Strait of Hormuz, just one day after reopening it. The move came in response to the United States' ongoing blockade of Iranian ports, which Tehran described as a violation of the ceasefire. The Strait of Hormuz, through which about a fifth of global oil and LNG shipments pass, had briefly reopened after a ceasefire between Israel and Lebanon raised hopes of de-escalation. US President Donald Trump told AFP that a deal with Iran was near, claiming there were "no sticking points at all," but Iran rejected the assertion, with state broadcaster IRIB reporting that Tehran had no plans to attend upcoming talks in Pakistan. Fars and Tasnim news agencies cited anonymous sources saying the atmosphere was not "very positive" and that lifting the blockade was a precondition for negotiations. Over the weekend, an American destroyer fired on and seized an Iranian vessel attempting to evade it, prompting Tehran to warn of retaliation. Iran's Revolutionary Guards stated that any ship passing through the strait without permission would be considered cooperating with the enemy and targeted. Despite the surge in oil, equities climbed as the S&P 500 and Nasdaq closed at record highs, with strong gains in Tokyo, Seoul, Taipei, Hong Kong, Shanghai, Wellington and Manila. The dollar strengthened against major currencies. Traders remain cautious, with Pepperstone's Chris Weston noting the path to a formal agreement remains uncertain and vulnerable to sudden shifts.
President Trump claims there are "no sticking points" in Iran negotiations, even as Tehran explicitly states it has no plans to attend the next round of talks and insists the US blockade remains unresolved. The disconnect between Washington's optimism and Iran's firm conditions exposes the fragility of any diplomatic progress. With only one inconclusive 21-hour session held since April 11, the chances of a durable agreement appear increasingly remote. Market swings on conflicting signals show how speculative the current calm really is.
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