The price of oil rose sharply Monday after Iranian government-aligned media reported that the country was cutting off talks with the United States to end the war.

Conflicting comments from President Donald Trump hours later did little to dent oil’s jump, although prices ended the day somewhat lower than the highs of the morning.

U.S. crude oil closed higher by 5.5% at $92.16 per barrel. International Brent crude closed higher by 4.5% at $94.98 per barrel.

Heating oil, a proxy for jet fuel, also rose 4%, while wholesale gas prices rose 2%.

As a result of the most recent decline in oil prices, the cost of retail gasoline was down 24 cents on Monday from this year’s peak. Still, gas prices remain higher by 44% on average than they were before the war.

Government bond yields, which heavily influence consumer borrowing rates, also rose slightly alongside energy prices.

The 10- and 30-year Treasury yields rose to the highs of the day after the report out of Iran but later fell to near earlier levels. Yields on shorter-term bonds such as the two- and five-year Treasuries, however, held on to most of their gains through the afternoon.

Monday’s market moves essentially put oil prices back to levels from mid-May, before they saw two weeks of declines as administration officials continued to suggest that some kind of deal with Iran to end the war was within reach.

Now, as the war enters its fourth month, Tehran is reportedly suspending talks and “the exchange of texts through mediators” to protest Israel’s expanding offensive in Lebanon.

Iran also said it was “determined to consider the complete closure of the Strait of Hormuz and the activation of other fronts including the Bab el Mandeb Strait,” a critical commercial waterway off the coast of Yemen.

In response, Trump told NBC News that the U.S. will keep its blockade on Iranian ports. “If they don’t want to talk, that’s OK with me,” he said.

In a separate comment to CNBC, Trump said he was not concerned about oil prices that continue to rise. “I think the oil will be dropping like a rock in the very near, you know, the very near distance,” he said.

Shortly after giving both of those interviews, Trump posted on social media, “Talks are continuing, at a rapid pace, with the Islamic Republic of Iran.”

NBC News has not independently confirmed the Iranian report or Trump’s claim Monday afternoon that talks were proceeding.

Investors on edge

“The (largely) closed Strait of Hormuz remains the focus for commodity market observers,” HSBC strategists said in a note Monday morning.

“Commodity markets have, so far, absorbed the shock better than some of the worst-case scenarios, reflecting high inventories before the conflict and rapid shifts to redirect commodity trade,” they added.

“However, the longer the Strait of Hormuz remains closed, the more stocks will be run down and at some point they may reach critical functional lows, which could see sharper (non-linear) price rises and genuine shortages,” they said.

For most of May, daily ship traffic through the Strait of Hormuz remained in the single digits, according to data from S&P Global Market Intelligence.

U.S. stocks also fell initially after the latest headlines about the Iran war, but declines reversed in the afternoon following Trump’s comments. Indexes were also buoyed by renewed momentum in AI stocks, following a series of product announcements from Nvidia overnight.

The Russell 2000 index, which tracks smaller companies and whose largest constituent is worth only $70 billion, struggled to turn positive throughout the day.

The disparity between more mainstream indexes, such as the S&P 500 and Nasdaq composite, and the Russell 2000 illustrates the bifurcation in markets between the indexes that are buoyed by large, AI-fueled companies and those that aren’t.

Internationally, stocks saw more widespread selling Monday, with benchmark indexes in Germany, France, the U.K. and Italy closing lower by around 0.5%. The pan-European Stoxx 600 fell 0.8%.