Oil prices rose almost 3% in early Asian trade on Monday as stalled US-Iran talks heightened concern over the Strait of Hormuz, while share futures weakened and the dollar strengthened.
Brent crude rose 2.8% to USD 104.06 a barrel, while US crude gained 2.7% to USD 97.97 a barrel, as markets priced in renewed geopolitical risk in the Gulf.
US President Donald Trump rejected Iran’s response to a US peace proposal on Sunday, calling Tehran’s demands “totally unacceptable” as indirect negotiations remained stalled.
Iran’s proposal reportedly sought an end to hostilities on all fronts, sanctions relief, reparations and recognition of Tehran’s position on the Strait of Hormuz.
Bruce Kasman, global head of economics at JPMorgan, said the Middle East conflict had entered its 11th week. He said higher energy prices remained “headwinds rather than expansion-ending obstacles.”
Kasman warned that markets faced a higher risk of sharper moves the longer the Strait remained effectively shut, with JPMorgan’s commodities teams seeing operational stress build through June.
The dollar strengthened as investors sought liquidity, edging higher against the Japanese yen, while the euro slipped slightly.
Share futures softened as investors approached a week of earnings from major technology and retail companies with caution.
