Oil prices hit three-week high after US–Iran talks collapse
Oil prices rise after breakdown of US–Iran talks (photo: Getty Images)
Global oil prices continued to rise and reached a three-week high amid the collapse of peace talks between the US and Iran, Reuters reports.
Brent oil futures rose by about 2%, reaching a three-week high of $107.97 per barrel in Asian trading, which heightened inflation concerns and prompted traders to largely price out interest rate cuts in developed markets this year.
S&P 500 futures fluctuated in the Asian session but held a slight gain of about 0.2% after markets in Taiwan, Tokyo, and Seoul followed Wall Street to record highs on a new wave of optimism around AI.
Although the ceasefire has frozen most of the fighting in the Middle East conflict, markets are primarily focused on the closed Strait of Hormuz, through which almost no vessels carrying oil and gas have passed in recent days.
The average price of LNG for June delivery to Northeast Asia last week stood at $16.70 per million British thermal units, nearly 61% higher than pre-war levels.
Analysts at Goldman Sachs sharply raised their year-end forecast for Brent oil prices from $80 to $90 per barrel.
"Non-linear price increases are likely if inventories drop to critically low levels, which we have not seen in the last few decades," they warned in a note.
Situation in the Middle East
The crisis in negotiations between the US and Iran deepened over the weekend after the visit of Iran's Foreign Minister Abbas Araghchi to Pakistan ended without any progress.
In particular, the White House announced that Trump envoys Steve Witkoff and Jared Kushner would meet Araghchi in Islamabad, but the Iranians did not give a clear response. Against this backdrop, Donald Trump told Axios that Iran's position forced him to cancel the trip.
According to three US officials, Trump plans to hold a meeting in the Situation Room on Monday regarding Iran with his team responsible for national security and foreign policy.
One source said Trump's team will discuss the deadlock in negotiations and possible next steps.
Recently, US President Donald Trump said he would not use nuclear weapons against Iran. He dismissed the idea in response to journalists' questions at the White House.
A blockade against Iran could bring the US unexpected profit and benefits thanks to the so-called prize courts law, which has not been used since World War II. However, not only could the US take advantage of such an opportunity.
