Brent crude climbed above $108 per barrel on Monday, April 27, after a second attempt to restart peace negotiations between the United States and Iran broke down, pushing oil markets sharply higher and dimming near-term hopes for a reopening of the Strait of Hormuz.
June-delivery Brent futures rose more than three percent to $108.90 per barrel by late morning in New York, while US West Texas Intermediate (WTI) futures with June delivery added nearly three percent to $97.10.
President Donald Trump cancelled plans on Saturday to send envoy Steve Witkoff and Jared Kushner to Islamabad for a second round of negotiations with Iran, writing on Truth Social that too much time had been wasted on travel and citing what he described as confusion within Iran’s leadership.
Iranian President Masoud Pezeshkian separately told Pakistani Prime Minister Shehbaz Sharif that US actions were undermining trust and complicating dialogue, and reiterated that Tehran would not enter what he called forced negotiations.
The conflict has now entered its ninth week, triggering what the International Energy Agency (IEA) has described as the largest energy supply shock on record, while intensifying inflationary pressures and weighing on the global growth outlook.
“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,” said Warren Patterson, head of commodities strategy at ING. “The lack of progress means the market is tightening every day, requiring oil prices to reprice at higher levels,” he added.
Goldman Sachs raised its oil price forecast on Sunday, now expecting Brent to average $90 per barrel in the fourth quarter, up from its previous forecast of $80, citing expectations that exports through the strait and Gulf production will take longer than expected to normalise.
Despite the impasse, a diplomatic signal emerged during Monday’s session. Iran submitted a new proposal to the US for reopening the Strait of Hormuz and ending the war, with the suggestion that nuclear talks be deferred, according to Axios, citing a US official and two sources with knowledge of the matter. The proposal, reportedly conveyed via Pakistani mediators, called for extending the ceasefire to allow progress toward a lasting settlement while postponing nuclear talks until the US blockade of the strait is lifted.
Commodity Context founder Rory Johnston noted that any reopening of the strait would likely trigger an immediate drop of between $10 and $20 in crude prices due to speculative positioning, but cautioned that relief would be temporary, with supply chain bottlenecks and infrastructure damage likely to keep the market tight well beyond any diplomatic breakthrough.
