Brent crude futures surged about 8% to around $103 per barrel on Monday, recovering last week’s losses as geopolitical tensions in the Middle East escalated sharply following renewed disruption to one of the world’s most critical shipping routes.
The rally came after reports that the United States is moving to enforce a blockade of the Strait of Hormuz, following the collapse of weekend negotiations with Iran in Pakistan. The measures are expected to restrict vessels entering and leaving Iranian ports, further tightening already strained maritime flows through the region.
The diplomatic breakdown adds to a rapidly deteriorating standoff between Washington and Tehran. Talks reportedly failed over disagreements tied to Iran’s nuclear programme, regional security conditions, and demands including sanctions relief, war reparations, and broader ceasefire arrangements.
The Strait of Hormuz, a key artery for global oil and gas shipments, has remained effectively disrupted since the onset of the conflict. Market participants say the latest escalation risks converting a partial disruption into a sustained supply shock, amplifying volatility across global energy markets.
Despite the tightening outlook, Saudi Arabia said it has restored full pumping capacity through its East–West pipeline to the Red Sea, alongside resumed output from the Manifa field. The move is seen as an attempt to cushion global supply losses and stabilise export flows.
The spike in oil prices has renewed concerns over global inflation, with analysts warning that sustained crude above $100 could delay interest rate cuts and increase pressure on import-dependent economies.
