Oil prices extended their rally on Monday, climbing nearly 2% as stalled peace talks between the United States and Iran and continued disruptions in the Strait of Hormuz kept global supply under pressure.Brent crude futures rose $2.16, or 2.05%, to $107.49 a barrel, the highest since April 7, while US West Texas Intermediate (WTI) gained $1.77, or 1.88%, to $96.17 a barrel.The latest surge follows sharp gains last week, when Brent and WTI climbed nearly 17% and 13%, respectively, their biggest weekly rise since the war began, reported Reuters.
Peace talks falter, tensions rise
Hopes of reviving diplomatic efforts weakened over the weekend after US President Donald Trump scrapped a planned Islamabad visit by envoys Steve Witkoff and Jared Kushner, even as Iranian foreign minister Abbas Araqchi arrived in Pakistan.“This move puts the ball squarely back in Iran’s court, and the clock is now ticking loudly,” IG market analyst Tony Sycamore said, adding that Iran could face pressure to shut production at ageing oil fields if storage capacity runs out, as per Reuters.
Supply squeeze intensifies
The supply outlook remains tight as Tehran has largely closed the Strait of Hormuz, while Washington continues its blockade of Iranian ports.Shipping data from Kpler showed that traffic through the key waterway remains severely restricted, with just one oil products tanker entering the Gulf on Sunday.The Strait of Hormuz, a critical global chokepoint, typically handles about a fifth of the world’s oil flows, making any disruption highly sensitive for markets.
Forecasts revised amid uncertainty
Reflecting the tightening supply scenario, Goldman Sachs raised its fourth-quarter oil price forecasts to $90 per barrel for Brent and $83 for WTI.“The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices… and the unprecedented scale of the shock,” analysts led by Daan Struyven said in an April 26 note, reported Reuters.The combination of geopolitical uncertainty, restricted shipping routes and limited output is keeping oil markets on edge, with prices expected to remain volatile in the near term.
