Global energy markets saw sharp upward movement in oil prices on Monday, triggered by former U.S. President Donald Trump’s public rejection of Iran’s response to a U.S. peace initiative, which he labeled “unacceptable.” The renewed geopolitical friction has amplified market anxiety over prolonged supply disruptions, as the strategically critical Strait of Hormuz remains largely closed to commercial shipping – a development that ripples directly through global energy pricing.
In early midday trading, Brent crude climbed $1.81, or 1.8%, to settle at $103.12 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.55, or 1.6%, to hit $96.97 per barrel. Earlier in the trading session, both benchmarks hit intra-day peaks, with Brent touching $105.99 per barrel and WTI reaching $100.37 per barrel. This rally comes on the heels of a roughly 6% price drop last week, driven by investor optimism that the 10-week-old conflict between the U.S. and Iran would be resolved quickly.
John Evans, an oil market analyst at PVM Oil Associates, cautioned that despite encouraging signals from backchannel diplomatic talks, the gap between Washington and Tehran remains far too wide for an immediate breakthrough. “We do not expect any breakthrough before Trump’s visit to Beijing this week, where he will press Chinese leadership to put greater pressure on Iran to compromise,” Evans explained. Trump is scheduled to arrive in Beijing on Wednesday for high-level talks with Chinese President Xi Jinping, where Iran tensions and other key geopolitical issues will top the agenda.
Over the weekend, Saudi Aramco CEO Amin Nasser issued a warning that the ongoing conflict has already cut off roughly 1 billion barrels of oil from global markets over the past two months. Even if the Strait of Hormuz reopens to full traffic immediately, Nasser noted it will take considerable time for global energy markets to rebalance and stabilize. Alongside this forecast, energy traders expect Saudi oil exports to China to decline further in June, driven by elevated prices and reduced production commitments.
Shipping tracking data from analytics firm Kpler confirms that three oil tankers have recently transited the Strait of Hormuz with their AIS tracking transponders disabled, a security measure to avoid targeted attacks. Separately, a second Qatari liquefied natural gas (LNG) vessel is en route to Pakistan, with an expected arrival on May 12. Japan is set to receive its first delivery of crude oil from Central Asia on Tuesday since the conflict began, marking a small step toward diversifying the nation’s energy supply away from Gulf routes.
Analysts at JPMorgan have projected that Brent crude will average roughly $97 per barrel throughout 2026, with little room for rapid price normalization even after the Strait of Hormuz fully reopens. Before the U.S.-Iran conflict erupted, the 2026 average price sat at around $85 per barrel, marking a nearly 14% increase in baseline pricing. U.S. independent shale producer Diamondback Energy has already positioned its portfolio to capitalize on prolonged volatility, purchasing options that profit from a widening price gap between WTI and Brent – a strategy that would deliver returns if the U.S. moves to restrict domestic crude oil exports.
The geopolitical uncertainty roiling oil markets has also spilled over into global gold and equities markets, triggering a flight to safe-haven assets. Gold prices edged slightly higher on Monday, as investors continued to view the precious metal as a reliable store of value amid conflict and economic uncertainty. Gold traded near $4,700 per ounce, representing a 0.5% gain from Friday’s closing price.
Global stock exchanges saw a tone of cautious optimism on Monday. While ongoing pressure from the energy crisis and geopolitical tensions keeps market volatility elevated, some sectors have benefited from rising commodity prices. Energy and raw material producers posted clear gains on the day, while technology and consumer goods stocks held relatively steady. Market participants are now closely monitoring developments around Iran and the upcoming Trump-Xi summit, as any escalation or de-escalation of tensions will have an immediate, direct impact on global financial markets.