May 11, World (LNW): Global oil prices climbed sharply on Monday after diplomatic efforts between the United States and Iran failed to produce a breakthrough, heightening concerns over prolonged disruptions to energy supplies through the strategically vital Strait of Hormuz.
Brent crude rose by more than three dollars a barrel in early trading, reaching approximately $104.47, while US West Texas Intermediate crude climbed above $98 per barrel. The gains extended last week’s upward momentum as traders reacted nervously to continuing instability in the Middle East.
Investor hopes of a near-term easing of tensions were dampened after US President Donald Trump rejected Tehran’s response to a Washington-backed peace initiative, reportedly describing the proposal as unsatisfactory. The development has fuelled fears that the 10-week confrontation between the two nations could intensify further, placing additional strain on global energy markets.
The ongoing restrictions around the Strait of Hormuz — one of the world’s most important oil shipping routes — have continued to disrupt supply chains, with shipping activity remaining limited amid security concerns. Analysts warn that any prolonged blockage or instability in the area could have serious implications for fuel prices and inflation worldwide.
President Trump is expected to travel to Beijing later this week for high-level discussions with Chinese President Xi Jinping, where the Iran crisis is anticipated to feature prominently on the agenda. Market observers believe Washington may seek Beijing’s assistance in encouraging Tehran towards a ceasefire and restoring stability to the shipping corridor.
According to market analyst Tony Sycamore of IG Group, traders are now closely watching the diplomatic engagement between the United States and China, with expectations that Beijing could play a decisive mediating role due to its close economic ties with Iran.
Meanwhile, the head of Saudi Aramco, Amin Nasser, warned that the global market has effectively lost around one billion barrels of oil supply over the past two months. He cautioned that even if shipping routes reopen fully, restoring stability to international energy markets could take considerable time.
Shipping intelligence data also indicated that several oil tankers recently passed through the Strait of Hormuz with tracking systems disabled, reportedly as a precaution against potential attacks. The practice is becoming increasingly common among operators attempting to maintain crude exports from the Gulf region despite escalating security risks.