Oil at three-week high as US-Iran peace talks stall
Quick Look
- Oil prices rose to a three-week high as US-Iran peace talks stalled, with Brent crude jumping around 2% to $107.97 a barrel.
- President Trump cancelled plans to send envoys to Pakistan for ceasefire talks, saying too much time was wasted on travel, and said Iran must come to the US to negotiate.
- However, Tehran has submitted a new proposal to reopen the Strait of Hormuz and end the war, with nuclear negotiations postponed for later.
AI-generated summary
Why It Matters
Oil prices have been volatile due to US-Iran tensions. A ceasefire was agreed on 7 April, but negotiations have stalled. The Strait of Hormuz is a critical chokepoint for global oil supplies, with about 20% of world oil passing through it.
Oil at three-week high as US-Iran peace talks stall
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy. The new week begins with the oil price rising, again, as the stalled US-Iran peace talks threaten to extend disruption to crude supplies from the Middle East.
Brent crude has jumped around 2% this morning to a high of $107.97 a barrel, the highest level since the two sides agreed a ceasefire on 7 April. Prices rose after Donald Trump cancelled his plan to send US envoys Steve Witkoff and Jared Kushner for ceasefire talks in Pakistan on Saturday, saying "too much time" has been "wasted on traveling".
The US president then doubled down on this position, telling Fox News: "If they want to talk, they can come to us, or they can call us. You know, there is a telephone. We have nice, secure lines."
However, there are signs of positive developments... Axios are reporting that Tehran has given the US a new proposal to reopen the Strait of Hormuz, and end the war, with nuclear negotiations postponed for a later date.
So, geopolitics will continue to dominate the markets, at the start of a Big Week, with several major central banks taking interest rates decisions in the days ahead. As Mohit Kumar, economist at Jefferies, explains: "Talks have stalled between US and Iran as Iran has stated that it will not negotiate till the US blockade remains in place, while US has stated that it doesn't know who it is negotiating with. Our base case remains that we are moving towards a deal but tail risk of short term escalation remains. It is not in the interest of either parties to escalate further. The latest Iran proposal shows the wiliness of Iran to negotiate, while Trump already wants a deal. Hence, we believe that we will eventually move towards a deal, but with some speed bumps along the way."
The agenda
11am BST: CBI distributive trades survey of UK retail
3.30pm BST: Dallas Fed manufacturing index survey
What to Watch
AI outlook — possibilities, not facts
Oil prices will remain elevated until there is clarity on US-Iran negotiations
Likely · Within days
Central bank rate decisions this week could impact oil demand outlook
Likely · Within weeks
Open Questions
- Will Iran accept Trump's condition to come to the US for negotiations?
- What specific terms is Iran proposing for reopening the Strait of Hormuz?
- Will central bank decisions this week amplify oil price volatility?
