The oil market soared around 6 per cent in Monday trading on uncertainty over peace talks between the United States and Iran after violence flared around the Strait of Hormuz.
Brent crude futures went up by $5.10 or 5.64 per cent to $95.48 per barrel, while the US West Texas Intermediate (WTI) crude futures advanced by $5.76 or 6.87 per cent to $89.61 per barrel.
The latest round of escalations in the Middle East pushed prices up, renewing fears of a drastic global energy shock, following a weekend of tensions, where shipping in the Strait of Hormuz has once again ground to a halt after a brief opening on Friday.
More than 20 ships passed through the strait on Saturday, carrying oil, liquefied petroleum gas, metals and fertilisers, which was the highest number of vessels crossing the waterway since March 1.
However, the new regime in Iran has warned that the latest closure will remain in place until the US blockade is lifted.
Over the weekend, the US seized an Iranian cargo ship that tried to break through its blockade while Iran said it would retaliate, heightening fears of a resumption in hostilities.
Iran has warned that it cannot guarantee safe passage through the Strait of Hormuz if its oil exports continue to be restricted, saying that security for shipping in the waterway cannot be separated from pressure on its own crude flows.
Prior to that, Iran said that passage for all commercial vessels through the Strait of Hormuz was open for the remainder of a ceasefire announced earlier. Shipping traffic through the Strait of Hormuz typically handles roughly one-fifth of the world’s oil and liquefied gas supply.
The renewed pressure also comes as Iran-aligned Houthis have threatened to target the Bab el-Mandeb Strait, raising concerns about additional risks to alternative export routes for Middle East crude.
With the two-week ceasefire set to expire later this week, the renewed hostilities cast doubts over prospects for a second round of talks between the US and Iran in Pakistan.
Meanwhile, US President Donald Trump said he was sending a new delegation to Pakistan for peace talks, which follows a previous 21-hour stint led by Vice President JD Vance, failing to broker an agreement. Reuters reported on Monday that Iran is considering attending the peace talks.