Oil Rises on Iran-U.S. Deadlock

CNBC reported Monday that crude oil prices climbed at the start of the week as Iran-U.S. oil supply negotiations remain stuck and traders brace for prolonged disruption to global flows.

Prices Jump as Diplomatic Freeze Deepens

Brent crude futures for July rose 1.27% to $110.65 a barrel in early Monday trading. U.S. West Texas Intermediate for June advanced 1.75% to $107.26 per barrel. Both benchmarks extended a rally driven by mounting concern that a negotiated reopening of the Strait of Hormuz is no longer imminent.

The move came after President Donald Trump posted an aggressive warning to Tehran on Sunday via Truth Social. Trump wrote that “the clock is ticking” for Iran and demanded the country act quickly. The post intensified market anxiety around the fragile ceasefire that was struck in April. That ceasefire has not translated into a full resolution.

How the Hormuz Closure Is Squeezing Supply

Before the conflict escalated, the Strait of Hormuz carried roughly one-fifth of global oil and natural gas supply. Tehran has kept the waterway largely shut throughout the standoff. Washington has responded by maintaining a blockade on Iranian ports. The combination has severed a critical artery for world energy markets.

The International Energy Agency warned in its latest monthly report that global crude stockpiles are being drawn down at an unprecedented rate. The agency cautioned that shrinking inventory buffers, if disruptions persist, could set the stage for sharp price spikes ahead.

Inventories Already Near Historic Lows

Separately, Swiss bank UBS estimated last week that global oil stockpiles could fall to roughly 7.6 billion barrels by the end of May. That figure would represent an all-time low, assuming demand holds steady month over month. Analysts say the combination of a closed strait, active port blockades, and depleted buffers leaves the market with almost no cushion against further shocks.

What Comes Next for the Market

Traders are now focused on whether any diplomatic channel between Washington and Tehran can be reopened before inventories deteriorate further. Trump’s escalating language over the weekend has reduced near-term optimism. Absent a breakthrough, analysts expect upward pressure on crude prices to persist through June.

The IEA’s warning about record inventory depletion adds institutional weight to what had previously been trader-driven concern. Markets will watch closely for any White House or State Department signals this week.

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