Crude Oil Prices Rise Amid Ongoing US-Iran Tensions

US-Iran Tensions Escalate, Oil Prices Surge

Oil prices jumped significantly on Monday, tracking global prices, as US President Donald Trump dismissed Iran's terms aimed at ending the Middle East conflict. The developments raised concerns over the continued closure of the strategically important Strait of Hormuz, a key shipping lane.

Brent crude futures rose as much as 4.2% to $105.54 a barrel, while West Texas Intermediate climbed above $99 per barrel. In India, MCX crude oil prices witnessed a similar upward movement, rising as much as 5.51% to ₹9,471 per barrel on 11 May.

The conflict, which erupted in late February, has led to a near shutdown of the Strait of Hormuz, severely disrupting global supplies of crude oil, natural gas, and fuels. The resulting supply crunch has driven energy prices higher and intensified inflationary pressures. The International Energy Agency said the conflict has caused the largest supply shock on record.

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According to a Reuters report, Trump is expected to meet Chinese President Xi Jinping this week, with US officials indicating that concerns over China's position on Iran will likely feature in the discussions. Talks are expected to cover the revenue China earns from Iran as well as potential Chinese arms exports to the country.

In a related development, a drone strike on Sunday briefly set a cargo vessel ablaze off the coast of Qatar in the Persian Gulf, marking the latest attack on shipping lanes since the ceasefire came into effect in early April. The United Arab Emirates and Kuwait also reported intercepting hostile drones.

Amin Nasser, CEO of Saudi Aramco, warned on Sunday that markets may remain unstable until 2027 if disruptions to shipping through the Strait of Hormuz persist for several more weeks. To offset supply disruptions, the company has redirected part of its oil exports through its Yanbu port on Saudi Arabia's western coast.

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According to Ponmudi R, CEO of Enrich Money, crude oil continues to experience elevated intraday volatility as traders assess potential supply disruption risks alongside evolving diplomatic developments, leaving the energy complex highly sensitive to geopolitical headlines.

The near-term outlook remains cautious and highly headline-driven, with volatility likely to persist amid developments around the Strait of Hormuz.