Oil prices jumped early Monday after Trump wrote in a social media post that Iran’s response on Sunday to the U.S.’s latest proposal was “TOTALLY UNACCEPTABLE!”
Brent crude, the international standard, gained $2.71 to $104 per barrel. It was roughly $70 per barrel before the war began in late February. Benchmark U.S. crude was $2.55 higher at $98 a barrel.
With the Strait of Hormuz, a crucial waterway for global oil and gas transport, still largely closed and as the U.S. is continuing its sea blockade of Iranian ports, analysts believe oil prices are likely to remain higher for longer.
The Iran war will certainly be an important piece of the agenda during the Trump-Xi summit. China has close economic links with Iran and the U.S. has been pressing Beijing to leverage its influence to help reopen the Strait of Hormuz.
“There remains a glimmer of hope that talks between Trump and Xi later this week could yield positive results on Iran,” ING commodities analysts Warren Patterson and Ewa Manthey wrote Monday.
“The hope is that China can use its influence over Iran to push it closer towards a peace deal,” they said. “Clearly, this is easier said than done.” The oil market is still very much “heavily headline-driven,” the pair added.
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