Oil Prices Jump on Renewed Geopolitical Tensions

Oil prices climbed sharply on Monday after President Trump rejected Iran’s latest response to a US peace proposal aimed at ending the ongoing Middle East conflict.

West Texas Intermediate crude futures rose above $97 per barrel after initially surging more than 3% during trading.

Trump described Tehran’s latest proposal as “totally unacceptable,” reinforcing concerns that diplomatic negotiations may remain stalled despite ongoing ceasefire discussions.

The renewed tensions added to fears that disruptions in the Strait of Hormuz could persist for an extended period, keeping global energy markets under severe pressure.

Hormuz Disruptions Continue to Threaten Global Supply

The Strait of Hormuz remains effectively closed following nearly ten weeks of conflict involving Iran, the United States, and Israel.

The shipping chokepoint is one of the world’s most important energy transit routes, handling roughly one-fifth of global oil and liquefied natural gas flows before the conflict began earlier this year.

The severe reduction in shipping traffic has disrupted global crude oil, LNG, and fuel supplies, contributing to rising energy costs and growing inflation concerns worldwide.

Although some tankers from Qatar, Saudi Arabia, and the United Arab Emirates have resumed limited transit operations, shipping activity remains far below normal levels.

Energy markets continue closely monitoring any signs of reopening or renewed military escalation.

Saudi Aramco Warns of Massive Supply Losses

Saudi Aramco Chief Executive Officer Amin Nasser warned that global energy markets are currently losing approximately 100 million barrels of supply each week because of the ongoing disruptions.

He also cautioned that if restrictions around Hormuz continue, full market normalization may not occur until next year.

Saudi Arabia has attempted to reduce the impact by redirecting some exports through alternative routes, including pipelines leading to the Red Sea.

However, analysts say alternative infrastructure cannot fully replace the enormous volumes that typically move through Hormuz.

Fresh Attacks Raise Ceasefire Concerns

Security risks across the Gulf region intensified again over the weekend.

Fresh drone attacks near Qatar and military interceptions reported by the United Arab Emirates and Kuwait highlighted the continued instability surrounding Gulf shipping routes and energy infrastructure.

At the same time, Israeli Prime Minister Benjamin Netanyahu warned that the conflict with Iran is “not over,” signaling the possibility of additional military operations.

The ongoing uncertainty has kept traders cautious as markets remain highly sensitive to geopolitical headlines involving the region.

Oil Market Remains Highly Volatile

Crude oil prices have experienced extreme volatility throughout the conflict as traders attempt to balance hopes for diplomacy against fears of prolonged supply disruptions.

WTI crude recently traded near $97.66 per barrel, up roughly 2.3% from the previous session.

Despite recent fluctuations, oil prices remain significantly higher compared to last year due to the unprecedented disruption to global energy flows.

Historically, crude oil reached an all-time high above $410 per barrel in late 2025 during the height of the global energy crisis.

Investors are expected to continue closely monitoring ceasefire negotiations, shipping activity in Hormuz, and further geopolitical developments across the Middle East.