CESAR MANSO / AFP
- Oil prices surged after the US and Iran failed to reach a deal during peace talks on Sunday.
- President Donald Trump said the US would move to blockade the Strait of Hormuz.
- Gas and jet fuel prices have surged since the key shipping route effectively shut down in March.
Oil prices have spiked past $100 per barrel after peace talks between the US and Iran fell through, spurring President Donald Trump to threaten a blockade of the Strait of Hormuz.
Brent crude, the international benchmark, surged as much as 9.1% late Sunday, from around $95 a barrel to nearly $104.
Similarly, West Texas Intermediate futures jumped as much as 9.4% to approach $106 a barrel.
Brent and WTI futures were both trading around 7% higher just after 7 a.m. ET on Monday, at around $102 and $104 each.
European natural gas futures rose 9% to about 47.50 euros per megawatt-hour, but remained well below their mid-March high of over 60 euros.
Here's where other key assets stood as of 7 a.m. ET on Monday:
- Dow futures are down 0.4% at about 47,900 points
- S&P 500 futures are down 0.5% at around 6,815 points
- Nasdaq futures are down 0.5% at about 25,100 points
- Germany's DAX is down 1.2%
- Britain's FTSE 100 is down 0.35%
- Euro Stoxx 50 is down 0.95%
- Japan's Nikkei 225 closed 0.6% lower
- Hong Kong's Hang Seng closed 0.9% lower
- Spot gold is down 0.9% at $4,745 per troy ounce
Oil prices receded after Trump announced a two-week ceasefire on April 7, conditional on Iran immediately reopening the Strait of Hormuz.
They bounced back after his vice president, JD Vance, traveled to Pakistan on Saturday to engage in peace talks with Iran, but failed to reach an agreement after nearly 24 hours.
In response, Trump said the US would enact a blockade of the Strait of Hormuz in a Truth Social post on Sunday.
"Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz," Trump wrote.
WTI is trading at a rare premium to Brent as the world scrambles to secure tight physical oil supply stateside.
"The unusual negative spread between the Brent and WTI prices suggests that traders believe that foreign demand for US crude oil is increasing as an alternative to oil supplied by Arabian Gulf producers," veteran market strategist Ed Yardeni wrote on Sunday evening.
On Saturday, Trump wrote on Truth Social that "massive numbers of completely empty oil tankers, some of the largest anywhere in the World," are headed to the US to load up on American oil and gas.
"We have more oil than the next two largest oil economies combined — and higher quality. We are waiting for you. Quick turnaround!" Trump posted on Truth Social.
Oil prices have skyrocketed globally since the US and Israel's war on Iran began in February. Iran retaliated by effectively closing traffic through the Strait of Hormuz. Around 20% of the world's oil supply and liquefied natural gas passes through the waterway off Iran's coast.
Major oil hubs across the Middle East have also been damaged amid the ongoing military conflict, further compounding the oil supply chain. The fallout is being felt globally, prompting some countries to shorten workweeks and implement other energy-saving tactics. The national average price of gas surpassed $4 in the US in late March.