Oil settles up over US$2 as Iran war stalemate stokes supply concerns

Oil prices surged more than US$2 on Monday due to concerns about the Iran war disrupting global oil supplies, according to wire reports. Brent crude futures climbed US$2.35, or 2.65%, to $90.87 per barrel, while West Texas Intermediate crude futures rose US$2.10, or 2.55%, to $84.50 per barrel. President Donald Trump threatened to bomb Oman if it interfered with the Strait of Hormuz, and called for Iran to surrender.

Iran vowed to escalate tensions in the strategic waterway and launch attacks if the US failed to fully implement an interim peace deal. Despite the heightened rhetoric, crude prices were unlikely to surge significantly unless there was a halt in oil exports from the Hormuz strait or a closure of the Bab el-Mandeb Strait. Oil prices hovered near $90 as traders weighed the risks of further disruption against the possibility of a resolution reopening the Hormuz strait and causing crude prices to plummet sharply.

US Energy Secretary Chris Wright said Trump had considerable leeway to wait out Iran while economic sanctions and an oil embargo squeezed the nation. Iran had not decided to resume talks with the US, and Trump urged Americans to brace for higher gasoline prices. Iran's Foreign Ministry spokesperson said talks with Oman over managing the Hormuz strait were ongoing and taking a long time due to complexity and multiple actors involved.

Shipments through the Hormuz strait were restricted, and negotiations reached a stalemate, limiting further declines in crude prices.