Oil Prices Surge as US-Iran Diplomatic Efforts Collapse

Global oil benchmarks climbed Monday morning as diplomatic efforts to stabilize relations between the United States and Iran unraveled, sparking fears of prolonged supply disruptions in the Middle East. The price surge follows President Donald Trump's decision to cancel a planned diplomatic mission to Islamabad, effectively stalling negotiations aimed at reopening the Strait of Hormuz and ending regional hostilities. The president cited internal confusion and leadership struggles within the Iranian government as the primary reasons for the cancellation, asserting that the U.S. maintains significant leverage in the current standoff. International benchmark Brent crude futures for June delivery rose 1.3% to $106.73, having previously peaked at $108.50 during the session. Similarly, U.S. West Texas Intermediate (WTI) futures for June delivery increased by 1% to reach $95.34. Analysts note that the lack of diplomatic progress is forcing a market repricing as energy flows through critical chokepoints remain uncertain. Market volatility was further exacerbated by reports that Iran's Revolutionary Guard boarded two cargo ships near the Strait of Hormuz, one of the world's most critical energy transit points. While reports suggest Iran offered a proposal to reopen the Strait and defer nuclear discussions, the U.S. has not engaged in these talks, leaving the market in a state of heightened tension.