Brent Crude Extends Gains

Brent crude futures rose to toward $111 per barrel on Monday as the market reacted to Iran’s formal rejection of a 45-day ceasefire proposal and President Trump's latest remarks. During a news conference President Donald Trump reiterated a strict Tuesday 8 p.m. deadline for Tehran to reopen the Strait of Hormuz or face the destruction of its power plants and bridges. Iran’s Foreign Ministry dismissed the temporary truce through Pakistani mediators and demanded a permanent end to hostilities and the lifting of sanctions as a prerequisite for any agreement. Physical market tightness remains with Dated Brent surging above $140 and Saudi Arabia raising its flagship Arab Light prices to a record premium of $19.50 over regional benchmarks. Traffic remains 90% below pre-conflict levels as major exporters face significant disruptions. Israel struck Iran’s largest petrochemical facility overnight while Tehran targeted energy infrastructure in Kuwait.

Brent crude futures rebounded to above $109 per barrel on Monday after testing the $107 mark as the market balanced a potential 45-day ceasefire proposal against President Donald Trump’s looming Tuesday deadline to strike Iranian infrastructure. While Pakistan and other regional mediators have floated a framework for an immediate truce and the reopening of the Strait of Hormuz, persistent concerns over a resolution timeline remain a negative overhang. Volatility intensified following a Truth Social post where the President warned that failing to open the strait would result in the destruction of Iranian power plants and bridges starting tomorrow. This escalatory rhetoric offset earlier optimism and followed a weekend OPEC+ meeting where the group approved higher output quotas to address global shortages caused by war-related damage.

Brent crude futures held below $108 per barrel on Monday, trimming gains from earlier in the session as reports of a potential Middle East ceasefire weighed on prices. The US, Iran, and a group of regional mediators are said to be negotiating terms for a possible 45-day truce that could pave the way for a more permanent resolution to the conflict. This shift in sentiment followed President Donald Trump issuing a fresh ultimatum to Iran and escalating threats against its civilian infrastructure if it failed to reopen the Strait of Hormuz. Tehran rejected the latest demand, leaving Hormuz effectively closed. Separately, OPEC+ warned after a weekend meeting that war-related damage to energy infrastructure could have lasting effects on oil supply even after hostilities ease. The group approved an increase in output quotas to help address a global supply shortfall, although Iran indicated on Saturday that Iraq would be exempt from its restrictions in the strait.