Oil Prices Rise Over Two Percent After US Cancels Iran Peace Talks in Pakistan

Oil prices saw a marked increase on Monday morning in Asia, with Brent crude rising by 2.2% to USD#107.70 a barrel and US-traded crude up 2.1% at USD#96.40. This surge followed the US President Donald Trump’s announcement on Saturday that Washington had cancelled plans for negotiations with Iranian counterparts in Pakistan.

Global energy supplies have faced considerable pressure since the initiation of the conflict with Iran on 28 February, when US and Israeli strikes, which included a primary school and killed Iran's Supreme Leader, effectively closed the critical Strait of Hormuz waterway. Iran had threatened to attack ships in retaliation.

Iranian Foreign Minister Seyed Abbas Araghchi stated on Sunday that “important discussions on bilateral matters and regional developments” are ongoing with Oman, a neighbouring state along the strait. He posted on social media, emphasizing, “our focus included ways to ensure safe transit that is to benefit of all dear neighbors and the world. Our neighbors are our priority.” Approximately one-fifth of the world’s crude oil and liquified natural gas (LNG) typically transits through the Strait of Hormuz.

Trump, in a Truth Social post, cited “too much time wasted on travelling” and “too much work” in sending US representatives to Islamabad. He further claimed “tremendous infighting and confusion” within Tehran’s leadership, adding, “Nobody knows who is in charge, including them! Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”

Brent crude has seen an increase of more than 10% since Trump last week announced an extension of a ceasefire with Tehran, ostensibly to allow its leadership to present a “unified proposal.”