Oil Surges Past $100 on Ceasefire Doubts

Crude oil briefly dipped toward $83 per barrel on Monday before trading around $85, after the US and Iran halted strikes against each other over the weekend amid efforts to revive diplomacy, with President Donald Trump reportedly open to renewed peace talks. The US paused its attacks against Iran starting late Friday without any official announcement, while Tehran said it had halted its retaliatory military strikes in response and engaged in talks with Oman regarding the Strait of Hormuz. Still, Iran-backed Houthi forces in Yemen claimed responsibility for attacks on facilities associated with Saudi Aramco at the Red Sea ports of Jizan and Yanbu over the weekend. Oil prices have surged nearly 40% this month as supply disruptions expanded from the Strait of Hormuz to the Red Sea, an increasingly important alternative route for Saudi Arabian crude exports that transports millions of barrels each day.

Crude oil fell 3% to around $89.3 per barrel on Friday after reports that Pakistan, with support from China, was seeking to revive negotiations between the US and Iran, raising hopes for a diplomatic path to ease tensions. According to reports, Chinese officials are increasingly concerned that attacks on Gulf states and disruptions in the Strait of Hormuz are hurting their economic interests. Despite the decline, crude oil remained up roughly 8% for the week after a sharp escalation in Middle East hostilities. Overnight, US Central Command carried out its 13th consecutive night of strikes on Iran, targeting military infrastructure and maritime capabilities. The US military said the waterway remains open with American support. Meanwhile, President Donald Trump warned he was considering an unprecedented military response against Iran and vowed severe retaliation if Tehran backed further Houthi attacks on vessels in the Red Sea.

Crude oil slipped toward $89 per barrel on Friday but remained up by around 10% for the week, as traders continued to assess mounting geopolitical risks to global energy supplies. The US launched a 13th straight day of strikes on Iran, with both sides ruling out near-term talks. President Trump also threatened "major military punishment" against Iran and the Houthis over any further attacks on Red Sea shipping and said he was considering a "massive attack" on Iran. His remarks followed attacks by Iran-backed Houthi militants on two Saudi oil tankers in the Red Sea, a key alternative export route for Saudi Arabia as fighting continued to disrupt traffic through the Strait of Hormuz. Asian buyers have begun discussing rerouting Saudi crude shipments through the Suez Canal and around Africa. Adding to supply constraints, the Caspian Pipeline Consortium suspended crude loadings at its Black Sea terminal after tanker attacks, disrupting around 80% of Kazakhstan's oil exports.