Oil prices continued their upward trajectory on Monday, increasing by nearly 2% as negotiations between the U.S. and Iran reached an impasse, coupled with constrained shipments through the Strait of Hormuz, which has contributed to a tight global oil supply environment. Brent crude futures increased by $2.16, representing a 2.05% rise, reaching $107.49 a barrel by 2346, marking the highest level since April 7. Meanwhile, U.S. West Texas Intermediate traded at $96.17 a barrel, up $1.77, or 1.88%.

In the previous week, Brent and WTI experienced increases of approximately 17% and 13%, respectively, marking the most significant weekly gains since the onset of the conflict. Expectations for the resumption of peace initiatives diminished over the weekend as U.S. President Donald Trump canceled a scheduled visit to Islamabad by his envoys Steve Witkoff and Jared Kushner, coinciding with the arrival of Iranian Foreign Minister Abbas Araqchi in Pakistan. This action clearly shifts responsibility back to Iran, with time now becoming a critical factor,” remarked market analyst Tony Sycamore in a note, indicating that Tehran might have to halt production at its deteriorating oil fields once storage capacity is exhausted.

Tehran has effectively shut down the strait, while Washington has enacted a blockade on Iran’s ports. Traffic through the Strait of Hormuz continued to be constrained, as evidenced by shipping data from Kpler, which indicated that only one oil products tanker entered the Gulf on Sunday. Goldman Sachs has adjusted its oil price projections for the fourth quarter, now estimating $90 per barrel for Brent crude and $83 for WTI, attributing this revision to a decrease in output from the Middle East.

The economic risks are more substantial than our crude base case alone indicates due to the net upside risks to oil prices, exceptionally high refined product prices, potential product shortages, and the unprecedented scale of the shock,” Daan Struyven stated in an April 26 note.