Crude oil prices rose on Monday after Iran ruled out talks to extend its memorandum of understanding with the United States, raising fresh concerns over tensions in the Strait of Hormuz.
US crude futures rose 1.8% to $83.87 per barrel, while Brent crude, the international benchmark, gained 2% to $90.31 per barrel.
The US and Iran agreed to a memorandum of understanding on June 17 that was intended to reopen the Strait of Hormuz while both sides negotiated a final agreement on Tehran’s nuclear programme within 60 days. That deadline expires on Monday.
Iranian Foreign Ministry spokesperson Esmail Baghaei said Tehran would not enter talks to extend the agreement.
“We did not start any negotiations at all, and the US violated the understanding from the very beginning; therefore, the 60-day issue is not relevant,” Baghaei said, according to Iran’s state news agency Tasnim.
A senior Iranian official told Reuters that Tehran would move to a more offensive posture if diplomacy with Washington failed.
“Iranian entities must be prepared to escalate tensions in the Strait of Hormuz and wider region,” the official said.
Shipping through the waterway was close to a standstill on Sunday, according to Kpler data, with only three vessels reported to have crossed the strait.
President Donald Trump also issued a threat against Oman when asked about discussions between the US ally and Iran over managing traffic through the Strait of Hormuz. Trump said Iran should “put up the white flag of surrender.”
The renewed strain around the Strait of Hormuz, a crucial global energy route, has added to pressure on oil prices as markets assess the prospect of further disruption to shipping and supply.
