Oil Nears $100 After Iran Halts Talks, Threatens Hormuz Closure

Iran suspended nuclear negotiations with the United States and warned it could close the Strait of Hormuz, sending U.S. crude futures up about 8% to roughly $96 and bringing Brent close to $100 on Monday.

Mohammad Bagher Ghalibaf, Iran’s lead negotiator, stated that a U.S. blockade of Iranian ports and Israeli strikes in Lebanon showed Washington was not upholding the ceasefire framework. Tehran announced it would stop exchanging messages with U.S. intermediaries until Israeli forces withdraw from occupied parts of Lebanon and halt strikes in Gaza.

Traders priced the risk that Iran might block the Strait of Hormuz, the narrow passage that carried about 20% of global seaborne oil in 2024. Iran also signaled it could prompt Houthi forces to increase operations in the Bab el-Mandeb, the Red Sea chokepoint.

Market analysts warned that simultaneous disruptions at Hormuz and Bab el-Mandeb would push prices above $100 and tighten inventories that Gulf producers flagged earlier this spring. Some traders treated Monday’s price moves as a return to wartime risk pricing rather than a single-day spike.

The spread widened between paper futures and physical barrels as buyers sought prompt cargoes. Physical traders face limited options to reroute large volumes quickly, and insurance and freight costs typically rise when key shipping lanes are under threat.

The coming 48 hours will test whether U.S. pressure can persuade Israeli Prime Minister Benjamin Netanyahu to scale back operations in Lebanon or whether Tehran will follow through on threats to blockade Hormuz or expand Houthi activity in the Red Sea. Podcast host Mario Nawfal commented, ‘Now is the perfect test to see who calls the shots: Netanyahu or Trump. Let’s see what happens next: Continued Israeli breaches, or Trump reigning in Bibi. My bet is on the latter.’

Oil markets will watch statements from Gulf producers and refiners for any adjustments to output and any moves to release strategic stocks. Physical market participants are monitoring tanker traffic and insurance notices for signs that shippers are avoiding key routes.

Any sustained closure of Hormuz or increased attacks on shipping would force buyers to route tankers around Africa, adding time and cost. The Strait of Hormuz links Persian Gulf producers to global markets; Bab el-Mandeb connects the Red Sea to the Gulf of Aden. Flows through Hormuz have been constrained since late February, and prices have been sensitive to Middle East tensions throughout 2026.