Forex▲ Bullish
Oil Surges 6% as Iran-U.S. Talks Collapse Over Reparations
WTI and Brent rally after U.S.-Iran talks fail; Strait of Hormuz remains blocked. Natural gas gains on hot weather demand. WTI tests $82 resistance.
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Oil markets jumped more than 6% Monday after weekend negotiations between the U.S. and Iran fell apart, with both sides hardening their positions over the reopening of the Strait of Hormuz.
Iran demanded payment of reparations as a condition for lifting the blockade of the strait, according to statements from both governments. President Trump responded that the U.S. would seek compensation from Iran "for all the people that they have killed and gravely wounded." He added that reparations for Iran were never discussed during the talks.
The standoff leaves the Strait of Hormuz closed, choking off roughly a fifth of global oil transit. Trump said the U.S. naval blockade has effectively halted Iran's oil exports, and he signaled he would use economic pressure to push Tehran back to negotiations.
"It looks that both U.S. and Iran believe that the other side will blink first," the report noted. That strategy means the strait could remain blocked for weeks.