Oil prices rose as U.S.-Iran diplomacy showed little sign of breaking a stalemate that has kept the Strait of Hormuz effectively closed and global energy supplies under pressure.
Brent crude, the international oil benchmark, climbed more than 3% to above $109 a barrel on Monday before easing slightly, according to captured BBC reporting. The move reflected investor concern that talks aimed at ending the two-month Middle East war are again losing momentum, even as Tehran has floated a proposal to reopen the waterway if Washington lifts its blockade of Iranian ports and vessels.
The dispute matters far beyond the Gulf. Roughly a fifth of the world’s crude oil and liquefied natural gas normally moves through the Strait of Hormuz, making the narrow passage a key pressure point for fuel prices, shipping, manufacturing and household costs.
A proposal with a major gap
Iran’s offer, as described in the supplied reporting, would reopen the strait to commercial shipping while postponing the hardest issue: Tehran’s nuclear program. President Donald Trump has insisted that any agreement ending the war must address Iran’s nuclear capabilities, and U.S. Secretary of State Marco Rubio said preventing Iran from obtaining a nuclear weapon “remains the core issue.”
That divide has left diplomacy uncertain. Trump said over the weekend that the United States had canceled plans to send senior representatives to Pakistan for another round of direct talks with Iranian officials. He argued that travel would waste time and said Tehran could contact Washington if it wanted talks.
The White House said Monday that Trump had met with his national security team to discuss Iran’s latest proposal, but press secretary Karoline Leavitt stopped short of saying the administration was formally considering it. Iran, meanwhile, sharpened its public posture. Defense ministry spokesman Reza Talaei-Nik said Tuesday, according to Iranian state TV, that the United States was no longer able to “dictate” policy to independent nations.
Economic pressure is spreading
The market reaction has been driven not only by crude prices but also by the risk that a prolonged closure could ripple through supply chains. Sophie Huynh, a portfolio manager and strategist at BNP Paribas, told the BBC that the shortage could affect goods ranging from “bin bags to medicine,” because crude oil feeds into many everyday products.
South Korea has already moved against suspected hoarding of medical syringes and needles as the war disrupts deliveries of naphtha, an oil-derived input used in plastics. Seoul imposed a ban this month on hoarding syringes and needles, and police said they were investigating four medical device distributors after a complaint from the food and drug safety ministry. More than half of South Korea’s naphtha imports last year came through the Strait of Hormuz, according to the country’s presidential office.
The concern is also showing up in broader economic planning. In the United Kingdom, Bank of England representatives were expected to attend a government Middle East Response Committee meeting on the conflict’s effect on living costs. Prime Minister Keir Starmer said the economic consequences “could still be with us for some time.”
Wider conflict complicates the path out
The diplomatic picture is further complicated by parallel conflicts and competing demands at the United Nations. Dozens of nations, in a statement led by Bahrain, called Monday for the Strait of Hormuz to be reopened. U.N. Secretary-General António Guterres warned that the pressures from the closure were cascading into “empty fuel tanks, empty shelves — and empty plates.”
At the same Security Council session, Iran’s U.N. ambassador, Amir-Saeid Iravani, said Tehran needed credible guarantees against another U.S.-Israeli attack before it could ensure security in the Gulf. French Foreign Minister Jean-Noël Barrot criticized both the U.S.-Israeli strikes on Iran and Iran’s role in blocking the strait, saying such passageways cannot be treated as private property.
Hezbollah’s rejection of U.S.-brokered negotiations between Israel and Lebanon has added another obstacle, raising doubts about a fragile ceasefire in that parallel conflict and making a broader U.S.-Iran settlement harder to reach.
For oil markets, the next shift depends less on another statement of intent than on evidence that shipping through Hormuz can resume and that Washington and Tehran can narrow the gap between maritime access and the nuclear demands at the center of the dispute.
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