U.S. crude oil prices jumped more than 4% to above $96 a barrel on Monday, reversing Friday’s decline as uncertainty over negotiations between Washington and Tehran renewed concerns about Middle East supplies and the future of shipping through the Strait of Hormuz.
Oil markets have remained volatile as diplomatic signals repeatedly shift expectations for the availability of crude from the Gulf. Brent crude also advanced sharply Monday, trading above $107 a barrel during Asian hours.
Iran Proposal Keeps Hormuz at Center of Oil Market
Iran presented a proposal through Qatari mediators last week that would reopen the Strait of Hormuz and restart nuclear negotiations within a week if the U.S. met several conditions, including lifting its naval blockade, removing sanctions on Iranian oil sales and restoring a regional ceasefire. President Donald Trump rejected the proposal on Saturday
Despite the rejection, Trump said Sunday that he expects further negotiations with Iran this week. Regional mediators have continued efforts to narrow the differences between Washington and Tehran, with another round of indirect discussions potentially beginning as early as Monday.
Iranian Foreign Minister Abbas Araghchi has said Tehran remains open to diplomacy while maintaining its conditions for reopening the strait.
Supply Risk Keeps Oil Prices Volatile
The Strait of Hormuz remains central to the market because of its role as a major route for global oil and liquefied natural gas shipments. Restrictions and security risks surrounding the waterway have contributed to large swings in crude prices throughout the conflict.
Recent increases in oil movements through Hormuz have provided some relief. Trump said more than 20 million barrels moved through the strait on Friday night, while a U.S. defense official cited by Axios put the amount at 22 million barrels.
Saudi Arabia has also reportedly restarted its East-West Pipeline, which allows crude to move from the kingdom’s eastern oil fields to the Red Sea without passing through Hormuz. The pipeline had been disrupted following drone attacks earlier in September.
Those alternative flows have helped moderate concerns about an immediate supply shock, but the absence of a diplomatic agreement means geopolitical risk remains embedded in oil prices.
Monday’s rebound illustrates how quickly the market is responding to developments surrounding the negotiations: signs of progress have pushed crude lower, while setbacks have brought supply concerns — and higher prices — back into focus.
