Global oil prices surged sharply in early Asian trading on Monday as tensions flared anew between the United States and Iran over the Strait of Hormuz.
President Donald Trump disclosed that U.S. forces had intercepted and seized a cargo vessel sailing under the Iranian flag, a move that heightened anxieties about potential interruptions to vital energy supplies.
This escalation followed Iran’s announcement over the weekend that it was once again prohibiting commercial ships from navigating the strategic chokepoint, vowing to strike any that tried to pass through.
The strait serves as a conduit for approximately 21% of the world’s seaborne oil and a substantial volume of liquefied natural gas, making any blockade a grave concern for global markets, as data from the U.S. Energy Information Administration underscores.
Brent crude futures jumped 6.4% to settle at $96.13, while West Texas Intermediate rose 7.5% to $90.15. Such volatility has defined energy trading since the U.S. and Israel carried out airstrikes on Iranian facilities on 28 February, eliciting threats from Tehran to disrupt shipping in the region.
In a parallel diplomatic effort, Trump stated that American representatives would arrive in Pakistan today for negotiations, with a White House official confirming Vice President JD Vance as the head of the delegation. Pakistan’s neutral stance positions it well as a venue, given its connections to both nations.
Iranian state media reported that Tehran had “no plans for now to participate,” although authorities have yet to elaborate on their position.
Analyst Saul Kavonic from MST Marquee told the BBC, “Oil markets continue to gyrate in response to oscillating social media posts by the U.S. and Iran, rather than the realities on the ground which remain challenging for oil flows to resume in a rapid fashion.”
He added, “This is all part of negotiations, physically playing out in real time on the Strait of Hormuz.”
The waterway remained off-limits to commercial traffic on Sunday, a day after Iran’s Islamic Revolutionary Guard Corps revoked a brief reopening. The IRGC accused the U.S. of violating ceasefire terms through its naval blockade, which Tehran demands be lifted. Trump had affirmed on Friday that the restrictions would persist until both sides forge a deal.
Experts caution that ongoing disruptions could drive prices even higher, exacerbating inflationary pressures amid robust Asian demand and constrained OPEC+ production capacity.