US oil benchmark jumps 8%; surpasses $100 after failed US-Iran talks

Tokyo: Oil prices surged back above $100 a barrel on Monday after diplomatic efforts between the United States and Iran failed to yield progress, and Donald Trump ordered a blockade targeting Iranian ports.

In early trading, US benchmark West Texas Intermediate (WTI) for May delivery jumped roughly eight per cent to $104.50 a barrel. Meanwhile, June Brent crude, the international benchmark, climbed seven per cent to $102.

Asian markets reacted nervously at the open. South Korea’s Kospi index initially dropped two per cent before trimming losses, while Japan’s Nikkei edged down 0.3 per cent.

The rebound in oil comes after a volatile week in which prices had fallen and equities rallied on news of a tentative two-week ceasefire brokered by Pakistan. However, the fragile truce quickly showed signs of strain, with continued Israeli strikes in Lebanon and the Strait of Hormuz effectively shut.

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Fresh talks held in Islamabad aimed at securing a longer-term agreement ended without a breakthrough. Negotiations were led by JD Vance and Iran’s parliamentary speaker, with both sides expressing pessimism afterwards.

Following the failed discussions, Trump announced a unilateral move to impose a blockade in the Strait of Hormuz. The US military later clarified that the measure, set to begin Monday, would apply specifically to vessels travelling to or from Iranian ports.

Markets have remained highly unsettled since the conflict erupted on 28 February, with Iran’s actions in the Strait of Hormuz disrupting a route that typically carries around one-fifth of the world’s oil and gas supply.