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Oil markets react to stalled negotiations
Global oil prices surged on Monday after Washington abruptly canceled a second round of peace talks with Tehran, raising fresh concerns over energy supplies from the Middle East.
Price movements
Brent crude, the international benchmark, rose 2% to $109.33 per barrel, while US-traded West Texas Intermediate climbed by the same margin to $96.78. The increases follow President Donald Trump's announcement over the weekend that a US delegation would not travel to Pakistan for planned discussions with Iranian officials.
Strait of Hormuz remains a flashpoint
The conflict has effectively shut down the Strait of Hormuz, a critical chokepoint through which roughly 20% of the world's oil and liquefied natural gas (LNG) normally flows. Energy analysts warn that prolonged disruptions could ripple through global supply chains, affecting everything from packaging materials to pharmaceuticals.
"We're not just consuming crude-we're consuming products. If the strait stays closed for weeks, the impact on supply chains will be far-reaching," said Sophie Huynh, a portfolio manager at BNP Paribas, in an interview with the BBC.
Diplomatic efforts in flux
Iranian Foreign Minister Seyed Abbas Araghchi suggested progress was still possible, noting ongoing discussions with Oman-Tehran's neighbor along the strait-on ensuring safe transit for regional and global trade. In a social media post, he emphasized that "our neighbors are our priority."
Araghchi arrived in St. Petersburg on Monday for talks with Russian President Vladimir Putin, according to Iran's state-run IRNA news agency. Meanwhile, Trump dismissed the need for further negotiations, claiming in a Truth Social post that Tehran's leadership was mired in "infighting and confusion."
"Nobody knows who is in charge, including them. If they want to talk, all they have to do is call," Trump wrote, adding that the US held the stronger position in the standoff.
Market reactions mixed
Traders appeared cautious, prioritizing tangible signs of de-escalation over verbal assurances. "They want concrete evidence, not just a fragile ceasefire," said Goh Jing Rong, an economics lecturer at Singapore Management University.
Equity markets reflected the uncertainty. London's FTSE 100 dipped 0.18% at the open, while France's CAC 40 remained flat and Germany's DAX edged up 0.13%. In Asia, however, stocks rallied. Japan's Nikkei 225 closed 1.38% higher, extending a 14% gain over the past month, while South Korea's KOSPI surged 2.15%, capping a 20% rise in the same period.
Broader economic concerns
Analysts note that Japan and South Korea, both heavily dependent on Gulf energy imports, were initially hit hard by the conflict. Their recent rebounds suggest investors are betting on a resolution or adapting to the new supply dynamics.
