Oil Prices Jump Over 2% as Iran Holds Firm on Strait of Hormuz Reopening Terms

Oil prices climbed more than 2% on Monday as Iran maintained its firm stance on conditions for reopening the Strait of Hormuz, leaving the timeline for normalizing the critical shipping artery uncertain after the United States rejected Tehran's proposal.

By 4:31 AM ET, the November contract for Brent crude futures, the international benchmark, had risen 2.7% to $107.08 per barrel. The U.S. benchmark, West Texas Intermediate (WTI) crude futures, gained 2.4% to trade at $94.66 per barrel. The gains have pushed Brent's advance for the month to approximately 18%.

Iran's Unchanged Demands

Iran's proposal, which it says remains unchanged, calls for the Strait of Hormuz to be reopened within seven days. However, this is contingent on Washington meeting several conditions as part of a return to broader negotiations.

Tehran's demands include:

• The lifting of a U.S. naval blockade
• An easing of military pressure
• The removal of sanctions on Iranian oil sales
• An agreement to a ceasefire

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Despite a rejection of these terms by U.S. President Donald Trump, Iranian officials have indicated their position is not softening. Still, diplomacy may be ongoing, with Axios reporting that Trump expects talks with Iran to resume this week, facilitated by mediation from Qatar.

Widening Supply Concerns

The Strait of Hormuz, which handled about a fifth of the world's oil and liquefied natural gas (LNG) shipments before the current conflict, has seen a sharp reduction in traffic. This has forced Gulf producers to seek alternative export routes and heightened global supply anxieties.

Adding to market tightness, Iran-backed Houthi rebels in Yemen have escalated attacks on Saudi Arabian infrastructure and commercial shipping in the Red Sea. Saudi Arabia announced on Saturday that it had intercepted two ballistic missiles and two drones launched by the group. These supply-side risks have a direct impact on refined products, with diesel prices in Europe and the U.S. reaching record highs amid disruptions to oil flows from the Middle East and Russia.