After indirect talks, new US sanctions target Iran's weapons supply
The latest sanctions come after the two sides held another round of indirect talks over a possible deal to end the war.
Oil prices surged on Monday amid growing uncertainty surrounding US-Iran tensions and their potential impact on crude supplies. Brent crude climbed 2.8% to $107.26 a barrel, while US West Texas Intermediate (WTI) surged 1.8% to $94.07 a barrel. These price hikes followed reports that US President Donald Trump had declined Iran’s latest proposal to ease tensions and resume Strait of Hormuz operations, a crucial global oil shipping route.
Market sentiment was further shaken by dwindling hopes for an imminent ceasefire, prompting traders to focus on the possible consequences of prolonged disruptions on global crude supplies. Trump stated on Sunday that US envoys would engage in further talks with Iran in the coming days, but maintained his skepticism, remarking that Tehran had yet to present terms that Washington would accept.
The US president affirmed that American forces were aiding the transportation of oil shipments through the Strait of Hormuz, where tanker traffic reportedly hit record levels over the weekend, with over 20 million barrels of crude passed through. Iran’s Foreign Minister Abbas Araghchi remained open to negotiations with Washington, yet he also warned of retaliatory actions in the event of renewed military action.
Diplomatic contacts between the two nations had resumed last week, off the back of UN General Assembly meetings in New York, where Araghchi reportedly met with US envoys Steve Witkoff and Jared Kushner through Qatari intermediaries. Iran proposed reopening the Strait of Hormuz and restarting nuclear talks within a week in return for lifting the US naval blockade, sanctions on Iranian oil exports, and a restoration of a regional ceasefire.
However, Trump’s rejection of this proposal has further heightened concerns over the safety of oil shipments through the strategic waterway. Oil traders are also eagerly anticipating the October 4 OPEC+ meeting, where key producers like Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman will discuss whether to maintain October production levels unchanged from September.
This development, coupled with ongoing geopolitical tensions, will certainly play a role in shaping market expectations for crude prices.
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