Oil prices surge as Iran–US talks stall and supply concerns grow

Global oil prices continued their upward trend on Monday, rising nearly 2% as uncertainty over Iran–US peace talks and restricted oil flows through the Strait of Hormuz tightened global supply expectations.

Benchmark Brent crude futures increased by $2.16 (2.05%) to $107.49 per barrel, marking their highest level since April 7. Meanwhile, US West Texas Intermediate (WTI) climbed $1.77 (1.88%) to $96.17 per barrel. Both benchmarks had already posted strong gains last week, with Brent rising nearly 17% and WTI about 13%—their biggest weekly jumps since the start of the conflict.

Market sentiment weakened after hopes of diplomatic progress faded. The United States reportedly cancelled a planned visit to Islamabad by key envoys Steve Witkoff and Jared Kushner, even as Iranian Foreign Minister Abbas Araghchi arrived in Pakistan, signalling stalled coordination between the two sides.

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Analysts say the situation has shifted pressure back onto Tehran, increasing uncertainty in already strained energy markets. IG market strategist Tony Sycamore noted that Iran may eventually face production constraints if storage capacity runs out.

Supply concerns have intensified as shipping through the Strait of Hormuz remains heavily restricted. Data from Kpler indicated that only one oil products tanker entered the Gulf on Sunday, reflecting severely reduced maritime traffic in one of the world’s most critical energy routes.

Further adding to market anxiety, Goldman Sachs raised its fourth-quarter price forecasts, predicting Brent crude at $90 and WTI at $83 per barrel due to lower Middle Eastern output and ongoing geopolitical risks.

The investment bank warned that the broader economic impact could be significant, citing higher fuel prices, refined product shortages, and the scale of disruption across global supply chains.

In a related development, consumer goods giant Procter & Gamble also warned of nearly $1 billion in profit losses over the next fiscal year due to rising oil prices, highlighting the widespread impact of the energy shock.