Brent oil tops $107 per barrel after Iran peace talks stall - I guess this would qualify as the most easily predictable headline of the morning, but it’s still a big story. Markets have been amazingly restrained throughout this Iran conflict, seeming to price in a fast supply recovery once the Strait of Hormuz is fully cleared. But, as it becomes increasingly apparent that that blessed event won’t be coming anytime real soon, crude prices have nowhere to go but up. It isn’t physics, exactly, just the law of supply and demand.
Key Excerpt:
Oil prices were higher on Monday morning as plans for a second round of peace negotiations between the U.S. and Iran unraveled again.
Iran’s Revolutionary Guard also reportedly boarded two cargo ships near the Strait of Hormuz as tensions in one of the world’s most important energy chokepoints remain high.
International benchmark Brent oil futures with June delivery rose 2.4% to $107.89 per barrel by 06:13 a.m. ET. U.S. West Texas Intermediate futures with June delivery also added 2.2% to $96.47.
“Oil is trading stronger this morning after attempts to get US-Iran peace talks back on track broke down, erasing hopes for a resumption of energy flows through the Strait of Hormuz anytime soon,” Warren Patterson, head of commodities strategy at Dutch bank ING, said in a research note.
“The lack of progress means the market is tightening every day, requiring oil prices to reprice at higher levels,” he added.
Though uncertainty looms large, Iran has offered a new proposal to the U.S. for reopening the Strait of Hormuz and ending the war while suggesting that nuclear talks be deferred, Axios reported Monday, citing a U.S. official and two sources with knowledge of the matter.
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