Vessels sail near Bandar Abbas along the Strait of Hormuz on 1 June 2026. [Getty]
Oil prices jumped and equities were mixed Monday as Middle East peace talks stumbled, while Lebanese authorities said Hezbollah had accepted a US proposal for a “mutual cessation of attacks.”
Crude futures shot around seven percent higher after an Iranian state news agency announced Tehran had suspended its negotiations with Washington via mediators.
International benchmark Brent closed 4.2 percent higher while its US counterpart, the West Texas Intermediate, added 5.5 percent.
The United States and Iran had traded strikes over the weekend and Tehran insisted that any deal to end the war must cover Israel’s escalating offensive into Lebanon.
The Tasnim news agency report cited the breakdown of the ceasefire and clashes in Lebanon as the reasons for the halt in dialogue.
“Hopes of further progress in US-Iran talks have been dashed,” said Chris Beauchamp, chief market analyst at online trading and investing platform IG.
“This has duly resulted in a spike for oil prices, since the combination of this and the weekend’s exchange of fire dramatically raises the chances of a fresh round of conflict,” he added.
On Monday afternoon however, Lebanon’s US embassy said that Hezbollah had accepted a US proposal for a “mutual cessation of attacks,” after Israel threatened more strikes on south Beirut on the eve of further Israel-Lebanon talks.
After the United States and Israel launched strikes on Iran at the end of February, Iran effectively closed the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas normally flows.
A ceasefire has largely held since mid-April, but traffic through the strait has been scant and negotiations have dragged on.
“Markets know that oil stockpiles are being rapidly run down, and the rosy assumptions around the renewal of supplies involved the straits being open by June,” said Beauchamp.
(AFP)
