Crude rises as Asian stocks fall ahead of blockade

Oil prices surged above $100 a barrel when markets reopened on Sunday following the breakdown of US-Iran talks and plans by Donald Trump to blockade the Strait of Hormuz.

Brent crude, the international benchmark opened up 8 per cent at $102.60, while West Texas Intermediate also jumped by 8 per cent to $103.99.

Trump’s announcement of a naval blockade of the Strait of Hormuz from Monday is intended to pressure the Iran regime, which has continued shipping oil to key markets such as China during the war. But analysts warned a blockade could escalate the conflict.

“Blockading the strait supports higher oil prices for longer as it points to a more drawn-out war,” said Michael Alfaro, chief investment officer of Gallo Partners, an energy- and industrials-focused hedge fund.

“A US blockade may work in the long term, but it creates complex uncertainty right now that requires a repricing of risk prompting higher oil prices.”

The oil market settled lower on Friday and Brent crude posted its steepest weekly loss since August 2022 due to optimism that the US-Iran peace talks could lead to a deal.