Oil prices climbed almost 3% in early trade on Monday as deadlocked US-Iran talks heightened fears over the Strait of Hormuz, while share futures eased and the dollar firmed in Asia.
Brent crude rose 2.8% to $104.06 a barrel, while US crude gained 2.7% to $97.97 a barrel, as markets reacted to renewed geopolitical strain in the Gulf and the risk of prolonged disruption to energy flows.
US President Donald Trump on Sunday rejected Iran’s response to a US proposal for peace talks, calling Tehran’s demands “totally unacceptable” as indirect negotiations remained stalled.
An Iranian proposal sent to the US reportedly called for an end to hostilities on all fronts and the lifting of sanctions, along with reparations and recognition of Iran’s position on the Strait of Hormuz.
“The conflict in the Middle East is now entering its 11th week,” said Bruce Kasman, global head of economics at JPMorgan. He added that while energy prices had surged, they remained “headwinds rather than expansion-ending obstacles”.
Kasman warned that the risk of a sharper market move increases the longer the Strait remains effectively shut, with commodities teams seeing operational stress building into June.
In currency markets, the dollar strengthened as investors sought liquidity, edging up against the Japanese yen, while the euro slipped slightly.
Share futures also softened, with investors cautious ahead of a week packed with earnings from major technology and retail firms.
Attention will also turn to US President Donald Trump’s visit to China later this week, where he is expected to meet President Xi Jinping for talks covering trade, Taiwan, artificial intelligence and nuclear issues.
Gold eased as it failed to attract strong safe-haven demand despite elevated geopolitical tensions.
