Photo caption: Oil pump jacks
*Trump calls Iran’s response to US peace proposal ‘unacceptable’
*Trump, Xi to discuss Iran among other topics later this week
*Aramco CEO warns 1 billion barrels lost will slow oil market recovery
*3 more tankers exit Strait of Hormuz with trackers switched off
Oil prices rallied on Monday, a day after President Donald Trump said Iran’s response to a U.S. peace proposal was “unacceptable,” raising supply fears as the Strait of Hormuz stayed largely closed, which kept the global market tight.
Reuters reported that Brent crude futures climbed $2.70 or 2.67% to $103.99 a barrel at 0902 GMT. U.S. West Texas Intermediate was at $97.66 a barrel, up $2.24, or 2.35%. They rose to $105.99 and $100.37 a barrel, respectively, earlier in the session.
Last week, both contracts recorded 6% weekly losses on hopes for an imminent end to the 10-week-old conflict that would allow oil transit through the Strait of Hormuz.
“Despite reassuring noises that back channels are still open and the parties are talking, our take is that the U.S. and Iran are as far away from agreement as when this supposed ceasefire started,” PVM Oil Associates analyst John Evans said. “We do not see anything changing before Donald Trump visits China and asks for Beijing’s aid in pressuring Iran.”
Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran among other topics with Chinese President Xi Jinping, according to U.S. officials.
The world has lost about 1 billion barrels of oil over the past two months and energy markets will take time to stabilise even if flows resume, Saudi Aramco CEO Amin Nasser said on Sunday.
Photo caption: Tugboats guide a crude oil tanker passing through the Strait of Hormuz with its Automatic Identification System transponder turned off, as it navigates the waters at Daesan port, in Seosan, South Korea, May 8, 2026. REUTERS/Kim Soo-hyeon/File Photo Purchase Licensing Rights
“Our bullish view remains and we align with Saudi Aramco’s opinion that even if Hormuz is settled and opened, it will take many months for normality in oil supply to break out,” Evans said.
Saudi Arabian crude oil exports to China are expected to fall further in June after buyers cut nominations because of costly prices linked to the U.S.-Iran conflict and lower supplies, trade sources told Reuters.
Meanwhile, three tankers carrying crude exited the Strait of Hormuz last week and on Sunday with trackers switched off to avoid Iranian attacks, Kpler shipping data showed. One was loaded with Iraqi crude and bound for Vietnam.
Japan’s industry ministry said a tanker carrying Azerbaijani crude oil was set to arrive as early as Tuesday, the first cargo of oil received from Central Asia since the Iran war began.
ANZ analysts expected Brent to remain above $90 per barrel through 2026 and around $80 to $85 per barrel into 2027 as demand growth resumes and inventories are gradually rebuilt.
In an attempt to hedge prices and ensure revenue, U.S. producer Diamondback Energy (FANG.O), opens new tab bought options to sell the price difference between U.S. West Texas Intermediate crude and Brent at around minus $42 a barrel in the coming months, a bet that could pay off if the U.S. banned oil exports. This would lead to a rise in domestic inventory as U.S. refiners typically process less domestic crude than is produced in the country and would push down WTI prices and widen its discount to Brent.
