Oil Prices Surge to $112 Amid Renewed Trade Tensions and Threats to Strait of Hormuz

Oil Prices Rise for Third Day as Trump Pressures Iran to Negotiate

Oil prices continued their upward trend for a third consecutive day as US President Donald Trump intensified pressure on Iran to come to a deal to end the ongoing war and reopen the crucial Strait of Hormuz. The Brent crude oil price advanced towards $112 a barrel, building on last week's gain of almost 8%. Meanwhile, West Texas Intermediate rose above $108.

The recent surge in oil prices has been significant, with prices increasing more than 50% since the US and Israel first attacked Iran at the end of February. This increase is largely due to subdued flows through the Strait of Hormuz, which has crimped supply from Persian Gulf producers. According to Morgan Stanley, the market is now in a "race against time" as the factors that previously restrained price rises from the war are set to come under strain if the vital waterway remains closed into June.

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The ongoing conflict has resulted in further pressure on supply, with the Trump administration letting a waiver for Russian crude sales lapse. This decision came despite a request by India to extend the measure. Energy facilities in the Persian Gulf were targeted over the weekend, with an attack by drones sparking a fire at a United Arab Emirates nuclear facility and underscoring the fragility of the ceasefire.

Reports from Iran's semi-official news outlets suggest that both sides in the conflict remain far apart. The Mehr agency reported that Washington offered "no tangible concessions," while seeking "to obtain concessions that it failed to obtain during the war, which will lead to an impasse in the negotiations."

President Trump met with his national security team on Saturday, including Vice President JD Vance, White House envoy Steve Witkoff, Secretary of State Marco Rubio, and CIA Director John Ratcliffe, to discuss the war. He is expected to meet again with his national security team on Tuesday.

In related developments, a member of Israeli Prime Minister Benjamin Netanyahu's security cabinet, Zev Elkin, stated that the country was poised to resume strikes on Iran should Trump decide to do so. Since the ceasefire began on April 8, Trump has repeatedly threatened to resume the bombing campaign that began on February 28.

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