Crude oil prices rose sharply as markets increasingly distance themselves from the possibility of a deal between the United States and Iran that could ease tensions and lead to the reopening of the Strait of Hormuz.
Brent crude rose 3.4%, reaching $107.77 per barrel, while US WTI crude climbed 4.2% to $102.18 per barrel, once again crossing the psychological $100 threshold.
The price increase came after US President Donald Trump rejected Tehran's counter-proposal to end the conflict. Trump called the Iranian offer "nonsense."
"We are in a stalemate, in a frozen conflict," Amos Hochstein, former senior energy advisor to President Joe Biden, told CNBC.
According to him, the Strait of Hormuz remains closed, creating a situation he described as “no war, no oil, no shipping.” Hochstein warned that it is very difficult to make progress this week, after the Trump-Xi Jinping meeting.
He predicted that oil prices could remain between $90 and $100 per barrel through the end of the year and into 2027, even if the Strait of Hormuz reopens in early June.
Meanwhile, Admiral James Stavridis, former NATO supreme commander, stated that Trump currently has three options: withdraw from the conflict, resume massive bombing, or attempt to militarily open the Strait of Hormuz.
According to Stavridis, the latter scenario seems more likely, but would require a huge military commitment and costs that could reach up to $1 billion per week.
Since the start of the US-Israeli conflict with Iran on February 28, both Brent and WTI have risen by more than 40%.
Saudi Aramco also warned that the global oil market could take years to return to normal if the Strait of Hormuz remains closed beyond mid-June.
