Oil prices surged on Monday after President Donald Trump rejected Iran’s response to a U.S.-backed peace proposal as “unacceptable,” heightening concerns over global crude supplies while the Strait of Hormuz remained largely shut.
Brent crude futures rose $4.04, or 3.99%, to $105.33 per barrel by 06:14 GMT. U.S. West Texas Intermediate crude gained $4.43, or 4.64%, reaching $99.85 a barrel.
The gains followed steep declines last week, when both oil benchmarks lost around 6% amid hopes that the 10-week conflict could soon ease, potentially allowing energy 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.
Focus Turns to Trump’s China Trip
U.S. officials said Trump is expected to arrive in Beijing on Wednesday, where he is likely to discuss Iran alongside broader geopolitical and economic issues during meetings with Chinese President Xi Jinping.
“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.”
Traders are increasingly looking to China as a potential diplomatic influence that could help reduce tensions and restore stability to global oil markets.
Supply Risks Continue to Support Crude Markets
Saudi Aramco chief executive Amin Nasser said on Sunday that roughly one billion barrels of oil supply had been lost globally over the past two months, warning that energy markets may require significant time to recover even if exports begin flowing normally again.
Shipping data from Kpler showed that three additional oil tankers carrying crude passed through the Strait of Hormuz last week with their tracking systems disabled, apparently to reduce the risk of Iranian attacks. The figures highlighted growing efforts by exporters to maintain Middle Eastern crude shipments despite escalating security concerns.
“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 forecast that Brent crude will remain above $90 per barrel throughout 2026, before easing toward a range of $80 to $85 per barrel in 2027 as inventories gradually recover and global demand growth strengthens again.
Chinese Oil Imports Fall to Near Four-Year Low
Highlighting the impact of ongoing supply disruptions, official data released over the weekend showed that China’s crude oil imports fell in April to their lowest level in almost four years.
The decline underscored the mounting pressure on global energy supply chains as instability in the Middle East continues to affect the world’s largest crude-importing economy.
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