US-Iran Talks Stall, Oil Prices Surge 5% on Strait of Hormuz Concerns

Oil prices surged by nearly 5% on Monday as US-Iran talks stalled over the Strait of Hormuz. The lack of progress in negotiations has dimmed market optimism about a swift agreement, leading to increased concerns about supply disruptions in the Middle East.

The Brent crude futures for October delivery settled at $87.72 a barrel on the ICE Futures Exchange, up 5.0% from the previous session. West Texas Intermediate futures for September delivery closed at $82.13 a barrel on the New York Mercantile Exchange, a gain of 5.1%.

Iran's six preconditions for reopening the strait, announced on August 8, have been met with skepticism by analysts and the US government. President Donald Trump pushed back against Iran's demands, stating that they should pay reparations for past acts of terrorism and the killing of protesters at home.

Concerns about further supply disruptions were also fueled by Yemen's Houthi rebels' attack on an Aramco refinery in Saudi Arabia's Jizan region. The US Strategic Petroleum Reserve fell to its lowest level since January 1983, adding to upward pressure on prices.