Brent crude climbs $1.09 amid uncertain Strait of Hormuz after first US-Iran negotiations since ceasefire
Brent crude futures rose more than $1 a barrel on Monday as US and Iranian officials held their first talks under an interim peace deal, with Tehran again claiming it shut the vital waterway.
Diplomatic push in Switzerland
US Vice President JD Vance met Iranian officials in Switzerland on Sunday for the first round of negotiations aimed at converting a 60-day ceasefire into a more permanent peace. The meeting came after President Trump and Iranian leaders signed an initial memorandum of understanding on Wednesday that included Tehran's pledge not to procure or develop nuclear weapons. Still, the gap between the two sides remains wide, with Trump threatening to restart the war and Iran pointing to what it calls Israel's violation of the ceasefire in Lebanon as a justification for closing the Strait of Hormuz.
Conflicting accounts over the Strait
Iran's military announced on Saturday that it was closing the waterway, accusing the United States of failing to restrain Israeli actions against Hezbollah. The naval wing of the Islamic Revolutionary Guards Corps warned any approaching ships they were putting their security at risk. Hours later, U.S. Central Command insisted the strait remained open. Captain Tim Hawkins, a spokesman for the command, said traffic continued to flow and US forces were monitoring the situation. Maritime intelligence firms painted a different picture: Windward tracked only 12 transits on Sunday, a fall from the previous day, and Ambrey senior analyst Daniel Mueller noted the situation remained fraught.
You close it and you won't have a country.
- Trump and Iranian leaders sign initial memorandum of understanding, including a nuclear pledge
- Iran's military announces closure of the Strait of Hormuz, citing Israeli ceasefire violations in Lebanon
- U.S. Central Command says the strait remains open; maritime data shows a drop in transits
- Vice President JD Vance leads first US-Iran talks in Switzerland under the interim deal
- Trump warns Iran via Fox News that closing the strait would mean the end of their country
- Brent crude rises $1.09 to $81.66 per barrel as Hormuz uncertainty weighs on markets
Oil markets react
The uncertainty pushed Brent crude up 1.35 percent to $81.66 per barrel, with West Texas Intermediate trading above $77. Gasoline prices dipped slightly to a national average of $3.94 a gallon, according to AAA, but remain 32 percent higher than before the war began in late February. S&P 500 futures pointed to a modest decline of less than 1 percent when US markets open on Monday. Analysts noted that further disruption to the strait, a conduit for a fifth of the world's oil supply, could amplify economic strain.
Nuclear questions linger
The initial memorandum signed on Wednesday contains a commitment by Iran not to acquire or develop nuclear weapons, but verification mechanisms are still undefined. David Albright, president of the Institute for Science and International Security, said in a BBC interview that many questions about policing the programme remain unanswered, leaving both diplomats and markets to watch for signs of enforcement in parallel with the Hormuz crisis.
