-- Crude oil futures climbed in after-hours trading on Monday as Iran signaled it may boycott upcoming peace talks in Pakistan, heightening fears that a fragile two-week ceasefire with the US will collapse when it expires on Tuesday.
Front-month West Texas Intermediate crude futures jumped by 4.71% to $87.80 per barrel, while Brent futures rose 4.36% to $94.32/bbl.
ING strategists said Iran's refusal to send its peace negotiating team to Pakistan opens the door to further escalation in the Arabian Gulf and higher oil and gas prices as the US-Iran ceasefire nears an end.
Iran said its participation in the second round of peace talks with the US is subject to the fulfillment of certain preconditions, according to local media.
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 experience and that this will not lead to good results, according to media reports.
"The United States' so-called 'blockade' of Iran's ports or coastline is not only a violation of the Pakistani-mediated ceasefire but also both unlawful and criminal," Baghaei said in a social media post on X.
Fueling further uncertainty, the US negotiating team, which is expected to be led by Vice President JD Vance, has reportedly not yet departed for Pakistan, contradicting reports that it was already on its way to Islamabad for talks.
On Monday, President Trump said, in a social media post, that he believed his administration's nuclear deal with Iran would be better than a 2015 international agreement reached after years of negotiations under the Obama administration.
Meanwhile, 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 ceasefire between the two sides appeared in jeopardy over the weekend after Washington said it had seized an Iranian cargo vessel that tried to run its blockade and Tehran vowed to retaliate.
"The US blockade of the Strait of Hormuz is of course blocking Iranian oil exports. But it is also an action of disruption directed towards Europe and Asia," said Bjarne Schieldrop, chief commodities analyst at SEB Research.
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.