Oil prices rise as US-Iran peace talks hit stalemate

Oil prices climbed on Monday as US-Iran peace negotiations hit an impasse, despite ongoing attempts to reopen the Strait of Hormuz. Brent crude, which represents two-thirds of global oil supplies, climbed 2.61% to $107.04 per barrel, while US West Texas Intermediate crude rose 1.96% to $94.22 per barrel. Both were up more than 2% the previous week.

Daniel Richards, a senior economist at Emirates NBD, noted that Brent had returned above $106 per barrel after a brief recovery on Friday, but the recent highs were stymied by the ongoing stalemate. President Donald Trump had dismissed Iran's seven-day plan to reopen the Strait, leaving negotiations without resolution and reintroducing a geopolitical premium to oil prices.

However, the US leader has indicated he remains open to reaching an agreement. Trump stated that he rejected Iran's latest proposal but expected further talks with Tehran this week. He added that the talks currently mirror what they might have looked like a year ago. The Iranian Foreign Minister, Abbas Araghchi, expressed readiness for both diplomacy and military confrontation with the US, while remaining open to dialogue.

He warned that Iran would stand firm against any new aggression, including a potential "doomsday war." Oil markets have been volatile due to ongoing negotiations and reports of the Saudi Arabia's East-West pipeline reopening after being attacked by Houthi rebels earlier in the month. Brent crude remains around $100 per barrel as traders price in a protracted standoff between the US and Iran, according to Kyle Rodda, a senior financial market analyst at Capital.com.