Global crude oil prices surged to around $104 per barrel on Monday following escalating tensions between the United States and Iran, after both sides failed to reach an agreement aimed at ending the ongoing conflict in the Middle East.

The market reaction comes amid renewed uncertainty over a potential ceasefire, with U.S. President Donald Trump describing the latest Iranian response to a proposed peace framework as “the weakest right now,” signalling that diplomatic efforts may be faltering.

Ceasefire Talks Collapse as Tensions Rise

According to reports, the United States recently presented a proposal intended to open negotiations and reduce hostilities in the 10-week-old conflict involving Iran and its regional adversaries.

However, Iran’s counterproposal reportedly focused on broader demands, including an end to hostilities across multiple fronts, compensation for war damages, and guarantees over its sovereignty in strategic waterways such as the Strait of Hormuz.

Iran also called for the lifting of sanctions and the release of frozen assets, while insisting on secure passage through critical maritime routes used for global oil and gas transport.

Iranian Foreign Ministry spokesperson Esmaeil Baghaei defended the country’s position, describing its demands as “legitimate” and necessary for regional stability.

The U.S. quickly rejected the response, with Trump indicating that negotiations had stalled significantly, raising fears that military escalation could resume.

Strait of Hormuz Becomes Global Pressure Point

The conflict has placed renewed focus on the Strait of Hormuz, a critical global energy corridor through which roughly one-fifth of the world’s oil and liquefied natural gas passes.

Shipping data shows increased disruption in the region, with multiple oil tankers reportedly exiting the strait under conditions of heightened security concerns. Some vessels have switched off tracking systems to avoid potential attacks, reflecting growing instability in the maritime route.

Two very large crude carriers transporting approximately 4 million barrels of Iraqi crude were among those recorded moving through the passage in recent days, according to maritime tracking data.

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Brent crude futures climbed by about 2.7 percent, stabilising near $104 per barrel, as traders responded to fears that further escalation could disrupt global energy supply chains.

Before the conflict intensified in late February, oil prices were trading below $70 per barrel, highlighting the scale of the market impact triggered by geopolitical instability in the region.

Analysts warn that continued tensions could place further pressure on global supply, especially if shipping routes through the Strait of Hormuz are further constrained or blocked.

Energy Security Concerns Grow

The latest developments have reignited global concerns about energy security, particularly in economies heavily dependent on Middle Eastern oil exports.

The conflict has already affected shipping patterns, insurance costs, and tanker routing decisions, with some vessels reportedly rerouting to avoid potential exposure to military activity.

Market observers say that the situation remains highly volatile, with prices likely to fluctuate depending on diplomatic progress or further escalation between Washington and Tehran.

For now, traders are closely watching any signals from both governments, as the possibility of renewed conflict continues to hang over global oil markets. https://www.reuters.com/