Oil prices surged on Monday after US President Donald Trump declared Iran’s response to his diplomatic overture unacceptable, reigniting supply fears as the Strait of Hormuz remained largely closed to commercial tanker traffic for a ninth consecutive week.
Brent crude futures climbed US$2.70, or 2.67 per cent, to US$103.99 per barrel at 09:02 GMT, while US West Texas Intermediate rose US$2.24, or 2.35 per cent, to $97.66 per barrel.
The gains reversed part of a sharp retreat seen in the prior week, when both contracts shed approximately 6 per cent as traders grew optimistic that a diplomatic resolution to the conflict could reopen one of the world’s most critical oil chokepoints.
That optimism has faded rapidly.
Trump’s dismissal of Tehran’s position hardened market sentiment and reinforced the view that disruptions to Persian Gulf oil flows will persist well into the near term.
The Strait of Hormuz, through which roughly one-fifth of global oil supply transits daily, has been largely impassable to commercial shipping since mid-March following Iranian military activity in the waterway.
The scale of the loss is significant. Aramco chief executive Amin Nasser has warned that approximately one billion barrels of oil have been removed from global supply over the past two months as a direct result of the closure.
This has begun to strain reserves held by major consuming nations and pushed Brent back above the psychologically important US$100 per barrel threshold for the first time since February.
Diplomatic channels remain active, if fraught. President Trump is scheduled to arrive in Beijing on Wednesday for talks with Chinese President Xi Jinping, with Iran expected to feature prominently on the agenda alongside trade and regional security, according to US officials.
Whether those conversations will produce any tangible shift in Tehran’s posture remains deeply uncertain.
Meanwhile, a small number of tanker operators have attempted to move crude through the strait regardless of the risks.
Shipping intelligence firm Kpler reported that three very large crude carriers navigated the Hormuz passage last week with their transponders switched off in an effort to avoid detection.
The tactic reflects the extraordinary lengths to which traders and shipowners are going to keep Middle Eastern barrels moving to Asian refiners.
Two of the vessels, the Agios Fanourios I and the Kiara M, transited the strait on Sunday, each carrying approximately two million barrels of Iraqi crude.
The Agios Fanourios I is bound for Vietnam and is expected to discharge its cargo at the Nghi Son Refinery and Petrochemical complex later this month, following at least two failed passage attempts after loading Basrah Medium on 17 April.
The Kiara M departed the strait the same day while running dark on location tracking systems.
A third vessel, the Basrah Energy, loaded two million barrels of Upper Zakum crude at ADNOC’s Zirku terminal on 1 May before successfully transiting the strait five days later, according to Kpler data.
The clandestine movements underscore the acute pressure facing Asian buyers heavily reliant on Gulf supplies, and suggest that some market participants have concluded the financial incentive outweighs the operational risk — at least for now.
