Oil Prices Surge as Iran Tensions Raise Supply Concerns
Oil prices moved sharply higher on Monday after President Donald Trump described Iran’s response to a U.S. peace proposal as “unacceptable,” increasing fears of prolonged supply disruptions in the Middle East.
Markets remained focused on the Strait of Hormuz, which has stayed largely restricted, tightening global oil supplies and adding upward pressure to crude prices.
Brent and WTI Crude Jump More Than 4%
Brent crude futures climbed $4.04, or nearly 4%, to $105.33 per barrel during early trading.
U.S. West Texas Intermediate (WTI) crude rose $4.43, or 4.64%, reaching $99.85 per barrel.
The rally followed a difficult week for oil markets, with both benchmarks posting losses of around 6% amid hopes that the 10-week conflict involving Iran could soon ease and allow oil shipments to resume normally through the Strait of Hormuz.
Geopolitical Headlines Continue to Drive Oil Markets
Analysts said oil prices remain highly sensitive to political developments involving the United States and Iran.
“The oil market continues to trade like a geopolitical headline machine,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
She noted that prices have been reacting sharply to every new comment, warning, or rejection coming from Washington and Tehran.
Trump’s China Visit Becomes Key Market Focus
Investor attention is now shifting toward President Trump’s upcoming visit to China later this week.
According to U.S. officials, Trump is expected to discuss Iran and broader geopolitical tensions during meetings with Chinese President Xi Jinping in Beijing.
Market analysts believe China could potentially play a role in encouraging Iran toward a broader ceasefire agreement.
“There is hope that Beijing could use its influence over Iran to help resolve disruptions in the Strait of Hormuz,” IG market analyst Tony Sycamore said in a market note.
Saudi Aramco Warns Oil Market Recovery Will Take Time
Saudi Aramco CEO Amin Nasser warned that the global oil market has already lost around 1 billion barrels of supply over the past two months.
He said energy markets would likely need significant time to stabilize even if shipping flows through the Strait of Hormuz eventually return to normal.
The comments reinforced concerns that supply shortages could continue supporting elevated oil prices for an extended period.
Tankers Avoid Iranian Threats in Strait of Hormuz
Shipping data from Kpler showed that at least three oil tankers carrying crude passed through the Strait of Hormuz last week with their tracking systems switched off.
The move was reportedly aimed at reducing the risk of Iranian attacks and highlights growing security concerns surrounding Middle East energy exports.
The development underscores the fragile state of global oil transportation routes amid ongoing geopolitical tensions.
Analysts Expect Elevated Oil Prices Into 2027
Analysts at ANZ said geopolitical risks are likely to remain embedded in oil prices even if immediate supply shocks begin to ease later in 2026.
The bank expects Brent crude to remain above $90 per barrel throughout 2026 and between $80 and $85 per barrel in 2027 as global inventories slowly recover and demand growth resumes.
China Oil Imports Fall to Four-Year Low
Official data released over the weekend showed that China’s crude oil imports fell to their lowest level in nearly four years during April.
The decline reflects the growing impact of global supply disruptions and rising geopolitical uncertainty on the world’s largest oil importer.
Markets are now closely monitoring developments in the Middle East and upcoming diplomatic talks between the United States and China for signs of potential stabilization.
