Oil prices surged on Monday as peace talks between the United States and Iran remained at a stalemate, with efforts to reopen the Strait of Hormuz still stalled. Brent crude, the international benchmark, was up 4.09 per cent, reaching $108.59 a barrel by 2.48pm UAE time. West Texas Intermediate, the gauge for US crude, traded 4.21 per cent higher at $96.31 a barrel.
Both benchmarks had closed more than 2 per cent lower just last week. Brent crude also rose 2.61% to $107.04 per barrel as US-Iran peace talks hit a stalemate. Gulf stock markets showed mixed results after US President Donald Trump dismissed an Iranian overture to reopen the vital Strait of Hormuz.
Mr. Trump stated at the weekend that he rejected Iran’s latest proposal, but indicated negotiators would hold further talks with Tehran this week. In a phone interview with Axios on Sunday, he remarked, “They want to make a deal, but it is not the deal that I want to make. It is what we would have maybe agreed to a year ago. They overplayed their hand.” Asked directly if he was considering resuming strikes against Iran, Mr. Trump responded, “I am always thinking about it.”
Escalating Tensions
Iranian Foreign Minister Abbas Araghchi affirmed Tehran’s readiness for a renewed military confrontation with the United States, while simultaneously expressing openness to diplomacy. He told NBC’s Meet the Press, “We are ready for diplomacy. We are ready for war at the same time,” adding that Iran had been tested both militarily and diplomatically. “We stand firm in the face of any new aggression, even if it comes to a doomsday war,” Araghchi stated.
Daniel Richards, a senior economist at Emirates NBD, noted that Brent was back above $106 a barrel after Friday’s brief relief rally faded. He explained that US President Donald Trump’s rejection of Iran’s seven-day plan to reopen the Strait of Hormuz left talks unresolved, restoring a geopolitical premium to crude. However, Trump has signalled he is still open to making a deal.
Kyle Rodda, senior financial market analyst at Capital.com, observed that Brent remained around $100 per barrel as the market priced in a protracted stalemate between the US and Iran. Rodda added, “As Iran struggles to maintain control of the Strait – potentially a reason why President Trump is less amenable to striking any sort of a deal with the Iranians – the markets are pricing in a less acute supply shock than at the start of the war.” Oil prices have remained volatile amid ongoing talks to end the conflict.
Regional Instability and Corporate Gain
Reports of Saudi Arabia's East-West pipeline reopening after it was attacked by Houthi rebels and shut earlier this month also contributed to market dynamics. Some crude has been getting out of the Gulf despite these disruptions. September Mideast oil exports rebounded to 12.8 million barrels per day, marking the highest level since the US-Israel war with Iran began in February of the same year.
This period of heightened regional tension and conflict has coincided with a strategic shift among major energy corporations. Cash-rich oil majors are now accelerating the development of existing assets and increasing exploration efforts in regions like Namibia, Brazil, Angola, and Venezuela. This aggressive expansion is part of a broader post-Iran strategy rethink, capitalizing on the instability and shifting geopolitical landscape in the Middle East.