Trump threatens fresh strikes on Iran
APA Corporation’s Forties Alpha oil platform in the North Sea.
Courtesy: APA Corporation
Oil prices rose on Monday after US President Donald Trump threatened new military action against Iran, raising concerns about the durability of a fragile interim peace deal reached last week.
Trump made the threat Sunday as Vice President J.D. Vance met with Iranian officials in Switzerland for initial talks under the interim agreement. The meeting was overshadowed by Tehran’s announcement that it was once again closing the Strait of Hormuz, a key route for global oil shipments.
Brent crude futures, the international benchmark for August, rose 1.23% to $81.56 per barrel. US West Texas Intermediate futures contracts for July rose 3.04% to $78.93 per barrel.
The talks in the Swiss resort of Bürgenstock were the first since Washington and Tehran signed a memorandum of understanding last week to end their conflict and extend a tenuous ceasefire for at least 60 days.
The agreement called for the reopening of the Strait of Hormuz and the cessation of hostilities in the region, including Lebanon. But Iran accused Washington of failing to broker a ceasefire there and said the latest talks would focus only on implementing the agreement rather than broader issues such as its nuclear program.
Middle East oil supplies are currently close to pre-war levels when crude oil held in warehouses and tankers is included, according to Quantum Strategy’s David Roche. But it warned in a report on Monday that the apparent glut reflects stock liquidation rather than a recovery in production, leaving the market vulnerable when those stocks are depleted.
As oil prices rebound on renewed tensions in the Middle East, Goldman Sachs said long-term supply shocks could accelerate the shift to electric vehicles, eroding long-term crude demand and increasing downside risks to oil prices.
