Oil prices surged 5% on Monday amid no solution in sight in the Middle East and escalating violence in the Strait of Hormuz, while Asian stock markets hesitated, with only Seoul rising thanks to the tech sector.
Around 06:30 GMT, the West Texas Intermediate (WTI) barrel for delivery in June, the U.S. market benchmark, rose by 4.86% to $100.06. The Brent barrel from the North Sea for delivery in July, the international benchmark, jumped by 4.20% to $105.52.
The prices spiked again, as Donald Trump sharply rejected Iran’s response to American proposals to end the war. “I have just read the response from the so-called ‘representatives’ of Iran. I do not like it, IT IS TOTALLY UNACCEPTABLE!” the American president wrote in capital letters on Sunday night in a brief message. This development reignited the markets, pushing back the prospect of a quick reopening of the Strait of Hormuz, through which a fifth of the world’s oil usually flows, and where traffic has been nearly paralyzed since hostilities began on February 28.
More than a month after the start of the truce between the two belligerents, negotiations seem more deadlocked than ever. “There seems to be little eagerness on both sides to worsen tensions, but finding a sustainable solution to end the conflict and reopen the Strait of Hormuz remains difficult, prolonging disruptions,” noted Lloyd Chan of MUFG Bank. He sees Trump’s rejection of Iranian demands as “a risk of prolonged uncertainty rather than rapid de-escalation, with persistent geopolitical risk premiums for oil markets.” Following the oil price rise, the U.S. currency remained stable (+0.2%) at 157.09 yen per dollar around 05:10 GMT, and gold dropped 0.90% to $4,673 per ounce.
Context: Oil prices surged amid escalating tensions in the Middle East due to the lack of resolution between the U.S. and Iran.
Fact Check: The content accurately reports fluctuations in oil prices and stock market performance in response to geopolitical tensions.
