Oil prices moved sharply higher on Monday after President Donald Trump described Iran’s response to a U.S.-backed peace proposal as “unacceptable,” intensifying concerns over crude supply disruptions as the Strait of Hormuz remained largely closed.
Brent crude futures rose $4.04, or 3.99%, to $105.33 a barrel by 06:14 GMT. U.S. West Texas Intermediate crude climbed $4.43, or 4.64%, to $99.85 per barrel.
The rebound followed heavy losses last week, when both benchmark contracts fell around 6% amid optimism that the 10-week conflict could soon come to an end, potentially allowing oil shipments to resume through the Strait of Hormuz.
“The oil market continues to trade like a geopolitical headline machine, with prices swinging sharply based on every comment, rejection, or warning coming from Washington and Tehran,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Markets Turn Attention to Trump’s Upcoming China Visit
According to U.S. officials, Trump is expected to arrive in Beijing on Wednesday, where discussions with Chinese President Xi Jinping are likely to include the situation involving Iran among other geopolitical and economic issues.
“Market attention now shifts squarely to President Trump’s visit to China this week,” IG market analyst Tony Sycamore said in a note.
“There is hope he can persuade Beijing to leverage its influence over Iran to push for a comprehensive ceasefire and a resolution to the ongoing disruption in the Strait of Hormuz.”
Investors are increasingly focused on whether China could play a role in easing tensions and helping stabilise global energy markets.
Supply Disruptions Continue to Support Prices
Saudi Aramco chief executive Amin Nasser said on Sunday that the world has lost around one billion barrels of oil supply over the past two months and warned that energy markets could take considerable time to recover even if exports resume.
Shipping data from Kpler also showed that three additional crude tankers passed through the Strait of Hormuz last week with their tracking systems switched off in an apparent effort to avoid potential Iranian attacks. The data highlighted a growing trend among exporters attempting to maintain Middle Eastern oil flows despite the security risks.
“Even if the acute oil shock fades by late 2026, the ongoing risk of renewed disruption in the Strait of Hormuz, depleted inventories and weaker policy coordination is expected to keep a geopolitical risk premium embedded in prices,” ANZ analysts said in a note on Monday.
ANZ analysts expect Brent crude to remain above $90 per barrel through 2026, with prices likely to stay in a range between $80 and $85 per barrel into 2027 as demand growth resumes and global inventories are gradually rebuilt.
China Imports Hit Multi-Year Low
Reflecting the impact of the supply disruptions, official data released over the weekend showed that China’s crude oil imports dropped to their lowest level in nearly four years during April.
The decline highlighted the growing strain on global energy supply chains as continued instability in the Middle East affects the world’s largest oil-importing nation.