Major stock exchanges across Europe were closed on Monday for a public holiday, leaving trading volumes in the region muted while one of the worlds most closely watched commodities, crude oil, moved higher amid geopolitical tension.
Oil prices briefly pushed back above $110 a barrel after President Donald Trump intensified his warnings to Iran, establishing a hard deadline of Tuesday evening for Tehran to reopen the Strait of Hormuz. In social media posts and in interviews with media outlets, Trump warned the United States would target Iran's power facilities if the waterway - a key conduit for roughly one-fifth of global oil flows - was not unblocked by the deadline. Iran rejected that ultimatum.
Earlier, Trump had given Iran until Monday to reach an agreement to allow tanker traffic to pass. The weeks-long closure of the strait has raised concerns that constrained maritime transit could transmit fresh inflationary pressures around the globe and potentially weigh on overall economic growth.
Prices have climbed sharply since the start of the joint U.S. and Israeli assault on Iran in late February, driven by fears that disruptions would tighten supplies of energy products used across many industries. The benchmark Brent crude futures contract was last reported up 0.3% at $109.37 a barrel. That contrasts with the price level prior to the conflict, when Brent was trading around $70 a barrel.
Despite elevated tensions, some indications emerged that Tehrans grip on the Strait of Hormuz might be loosening slightly. Reuters, citing a source familiar with proposals, reported that Iran and the United States have received a framework intended to end hostilities and reopen the strait. The report said the plan could be implemented as early as Monday.
Separate signals of selective reopening have also appeared. On Saturday, Iran authorized Iraq to use the Strait of Hormuz, reflecting a pattern in which Tehran has permitted passage on a country-by-country basis.
Market context and outlook
With large European markets closed for the holiday, price moves in oil and related markets have taken on outsized significance for traders monitoring energy supply risk and inflationary implications. The recent gains in crude highlight how geopolitical developments around the Strait of Hormuz remain a dominant influence on commodity prices and on expectations for broader economic conditions.
At the same time, reports of a possible framework to reopen the strait and instances of selective clearance for certain countries introduce a degree of uncertainty about how prolonged the current disruption might be. Market participants will likely watch closely for any concrete steps toward reopening or for further escalation that could tighten physical supplies and lift prices further.