-- Crude oil futures surged in midday trading on Monday as tensions between the US and Iran escalated following reported attacks on commercial vessels in the Strait of Hormuz, heightening fears of global supply disruption.
Front-month West Texas Intermediate crude futures climbed by 6.71% to $89.91 per barrel, while Brent futures were up 5.92% to $95.72/bbl.
"Iran reimposed its restrictions on the Strait of Hormuz after the US kept its blockade in place," ING strategists said in a note on Monday, adding that there are doubts over planned peace talks after the Washington seized an Iranian-flagged vessel.
President Trump reportedly threatened Iran with overwhelming military force again on Monday, saying lots of bombs will start going off if no deal is reached before the deadline of a fragile ceasefire with Tehran on Tuesday.
Trump dispatched a US negotiating team, including Vice President JD Vance, to Pakistan for talks with Iran, while casting doubt on the possible extension of the two-week ceasefire with Iran if a deal is not reached.
However, Iran's Foreign Ministry spokesperson, Esmail Baghaei, said there are no plans for a second round of talks with the US, adding that Washington is not learning from past experience and that this will not yield positive results, according to media reports.
"The United States' so-called 'blockade' of Iran's ports or coastline is not only a violation of Pakistani-mediated ceasefire but also both unlawful and criminal," Baghaei said in a social media post on X.
The ongoing US-Iran standoff over the Hormuz threatens to deepen the global energy crisis. It is part of the unresolved issues, which include Iran's nuclear enrichment program and Israel's ongoing invasion of Lebanon.
The US Navy fired on an Iranian cargo vessel in the Gulf of Oman on Sunday. The Navy later seized the ship, accusing the container vessel of trying to break through its blockade as Iran warned it would retaliate, heightening fears of a resumption in hostilities.
The seizure follows Iran's attack on commercial vessels in the Strait on Saturday, including a container ship belonging to France's CMA CGM and two Indian-flagged ships that were attempting to cross the strategic waterway.
Meanwhile, China has expressed concern over the US seizure of an Iranian-flagged cargo ship in the Strait and has urged all parties to resume peace talks.
Xi reportedly said, "The Strait of Hormuz should maintain normal passage, as this serves the common interests of regional countries and the international community."
Saxo Bank strategists said that the prolonged conflict has triggered a major energy shock, stoking inflation risks and fears of a global slowdown as hopes for peace have faded.