Oil prices stood at $104 on Monday as the United States and Iran failed to agree on a deal to end the war in the Middle East.
US President Donald Trump said on Monday that a ceasefire with Iran was “on life support” after he rejected Tehran’s response to a US peace proposal, fuelling concerns of a resumption of hostilities in the 10-week-old conflict that has killed thousands and disrupted vital energy flows following heightened tensions around the Strait of Hormuz.
According to Reuters, days after the US floated a proposal aimed at reopening negotiations, Iran on Sunday released a response focused on ending the war on all fronts, including Lebanon, where US ally Israel is fighting Iran-backed Hezbollah militants. The response was swiftly rejected by Trump.
Asked where the ceasefire stands, Trump told reporters on Monday, “I would call it the weakest right now, after reading that piece of garbage they sent us. I didn’t even finish reading it,” he said.
In its response, Iran was said to have also demanded compensation for war damage, emphasised its sovereignty over the Strait of Hormuz, and called on the US to end its naval blockade, guarantee no further attacks, lift sanctions, and remove a ban on Iranian oil sales.
The US had proposed an end to fighting before starting talks on more contentious issues, including Iran’s nuclear programme.
Defending the stance, Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, said, “Our demand is legitimate: demanding an end to the war, lifting the (US) blockade and piracy, and releasing Iranian assets that have been unjustly frozen in banks due to US pressure; safe passage through the Strait of Hormuz and establishing security in the region and Lebanon were other demands of Iran, which are considered a generous and responsible offer.”
Brent crude oil futures traded 2.7 per cent higher at around $104 a barrel as the deadlock kept the Strait of Hormuz under severe pressure. Before the war began on February 28, crude oil traded below $70 a barrel. The narrow waterway, used to carry one-fifth of the world’s oil and liquefied natural gas, has since become a central pressure point in the conflict.
Meanwhile, three tankers carrying crude exited the Strait of Hormuz last week and on Sunday, with trackers switched off to avoid Iranian attacks, shipping data from Kpler and LSEG showed on Monday, underscoring a rising trend affecting Middle East oil exports.
Two very large crude carriers, the Agios Fanourios I and the Kiara M, carrying 2 million barrels of Iraqi crude each, passed through the strait on Sunday, the data showed.
The Agios Fanourios I is heading to Vietnam to discharge its cargo at the Nghi Son Refinery and Petrochemical facility on May 26, the data showed. The tanker failed to transit the strait in at least two previous attempts since it loaded Basrah medium crude on April 17, Reuters reports.
