Oil prices surged on Monday following President Donald Trump's rejection of Iran's response to a U.S. peace proposal, reigniting concerns over supply disruptions. Brent crude futures rose $4.04, or 3.99%, to $105.33 a barrel by 0614 GMT. U.S. West Texas Intermediate climbed $4.43, or 4.64%, to $99.85 a barrel. The gains came after Trump declared Iran's reply "unacceptable," keeping the Strait of Hormuz largely closed and tightening global oil markets.
The previous week, both oil contracts had fallen by 6% on optimism that the 10-week conflict might end, allowing oil transit through the Strait to resume. However, renewed geopolitical tension reversed that trend. According to Priyanka Sachdeva, senior market analyst at Phillip Nova, "The oil market continues to trade like a geopolitical headline machine, with prices swinging sharply based on every comment, rejection, or warning coming from Washington and Tehran."
Market focus has now turned to Trump's upcoming visit to Beijing, scheduled for Wednesday, where he is expected to discuss Iran with Chinese President Xi Jinping. IG market analyst Tony Sycamore noted that investors hope Trump can convince China to use its influence to push for a comprehensive ceasefire and restore oil flows through the Strait.
Saudi Aramco CEO Amin Nasser said over the weekend that about 1 billion barrels of oil had been lost globally in the past two months, and markets would take time to stabilize even if shipments resumed. Kpler shipping data revealed that three crude-carrying tankers left the Strait of Hormuz last week with trackers disabled to avoid Iranian attacks, a sign of increasing evasion tactics.
ANZ analysts projected Brent crude would stay above $90 per barrel through 2026 and around $80 to $85 into 2027, citing persistent geopolitical risks, depleted inventories, and weak policy coordination. Demand recovery and gradual inventory rebuilding were factored into the forecast. China, the world's top oil importer, saw its inbound shipments drop to a nearly four-year low in April, according to official data released over the weekend.
Trump demands diplomatic solutions while his rejection of Iran's response fuels market volatility that hurts global oil importers. Nigeria relies on oil imports for refined products, and sustained high prices strain fuel supply and inflation. A prolonged Strait of Hormuz disruption benefits no African economy, especially those without refining capacity. Any U.S.-led resolution must account for downstream impacts on import-dependent nations.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
