Oil markets moved sharply higher in early Asian hours on Monday as stalled diplomatic efforts between Washington and Tehran, coupled with persistent restrictions on shipments through the Strait of Hormuz, kept supply concerns elevated.
Brent crude futures climbed over 2%, trading at $107.48 a barrel by 19:36 ET (23:36 GMT). The move extended gains seen at the end of the prior week as traders reacted to fresh signs that talks between the United States and Iran are not advancing.
U.S. President Donald Trump cancelled a planned trip by U.S. officials to Pakistan for talks on Iran over the weekend, a decision made shortly after Iranian officials left Islamabad. That cancellation underscored the limited traction in diplomatic engagement even after an earlier pause in direct hostilities.
Earlier in April, Trump indefinitely extended a ceasefire with Iran, and since that agreement there have been no direct confrontations between the two sides. Despite the absence of open hostilities, tensions have remained elevated. Two of the most prominent sources of friction are a U.S. naval blockade of Iranian access and Tehran's ongoing obstruction of the Strait of Hormuz.
Oil flows through the Strait of Hormuz - a crucial maritime channel for global energy shipments - showed scant signs of improvement over the weekend, sustaining market anxiety about potential disruptions to crude supply.
Compounding those concerns, U.S. Treasury Secretary Scott Bessent said the U.S. does not intend to renew a waiver that had allowed the purchase of Russian and Iranian oil already at sea. Washington had authorised those purchases temporarily to help offset some supply shortfalls tied to the Iran war.
The disruption to shipments has been substantial: Iran effectively blocked the Strait of Hormuz since late-February in response to U.S.-Israeli hostilities, a move that cut off roughly 20% of the world's crude supply. That reduction in available seaborne crude remains a central factor supporting higher prices and market nervousness.
With diplomatic avenues showing limited progress and physical constraints on a key trade route persisting, market participants are continuing to price in the risk of tighter global oil availability.