Iran-US War: Crude Oil Price Reclaims $100/Barrel As Failed Talks, Hormuz Blockade Fears Jolt Global Markets

Iran-US War: Crude oil price rallied on Monday after failed Iran-US peace talks and US President Donald Trump's warning to block Strait of Hormuz sparked concerns of prolonged energy supply shock. WTI crude futures rallied nearly 9.3% on Monday, April 13, to surge above $105 per barrel mark.

Brent crude futures too, staged a sharp rebound and rallied close around 8% close to $103 per barrel mark, as per Trading Economics. The sharp rebound in the global commodity markets hints at a wider global energy supply crisis if the Iran-US war continues to for longer.

Iran-US Peace Talks Fail

All eyes were on the high-stakes negotiations in Islamabad, which yielded no result as Iran and US were unable to reach an agreement by Sunday, leaving the existing two-week ceasefire in a precarious state.

Foreign Minister Abbas Araghchi wrote on X that Iran had engaged with Washington in "good faith" to end the conflict. Araghchi added: "But when just inches away from "Islamabad MoU", we encountered maximalism, shifting goalposts, and blockade," later explaining that the acronym referred to a "memorandum of understanding."

"The Blockade will begin shortly. Other Countries will be involved with this Blockade. Iran will not be allowed to profit off this Illegal Act of EXTORTION. They want money and, more importantly, they want Nuclear. Additionally and, at an appropriate moment, we are fully "LOCKED AND LOADED," and our Military will finish up the little that is left of Iran!," read a social media post by Donald Trump.

Strait of Hormuz Blockade

US President, on Sunday, updated about the peace talks' failure and warned of a Strait of Hormuz blockade. US Central Command said American forces would start implementing the blockade from 10 a.m. New York time on Monday. The restrictions apply only to ships entering or leaving Iranian ports, but have heightened anxiety at the Strait of Hormuz, a narrow route that links the Persian Gulf to world oil markets.

CENTCOM stated that the measure would be enforced in the same way for vessels from all nations. Ships travelling between ports that are not Iranian will still be allowed to pass through the Strait, although commercial operators remain wary after weeks of strikes and counterstrikes in the region.

Crude Oil Price Rally

Benchmark Brent crude futures jumped 8.36% to $103.16 a barrel, while US West Texas Intermediate contracts climbed 8.22% to $104.57 per barrel. European gas futures also rose sharply, at one stage trading almost 18% higher as traders reacted to the growing tension. Monday's surge has come after the crude oil prices dipped below $95 per barrel mark last week.