Oil rose after efforts to resume peace talks over the Iran war stalled, leaving the Strait of Hormuz almost impassable and prolonging the supply disruption that has roiled global markets.

Brent climbed as much as 3% to $108.50 a barrel and West Texas Intermediate advanced toward $97, before giving up some gains after Axios reported Tehran offered the US a fresh proposal to open the strait. Over the weekend, President Donald Trump canceled a planned trip by his top envoys to Pakistan, which is mediating talks, while Iran said it won’t negotiate if it’s being threatened.

A ceasefire has mostly held since early April, but shipping blockades by both the US and Iran have cut daily transits through the Strait of Hormuz to near zero. The supply shock has choked off supplies of crude, fuel, natural gas and fertilizers, raising concerns about an inflation crisis.

“The world is living on borrowed barrels and on borrowed time until the Strait of Hormuz reopens,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “Alarm bells will ring loudly if the strait doesn’t reopen during May. A global recession is guaranteed if it doesn’t reopen in time.”

Iran offered the US, through Pakistani mediators, a proposal to reopen the strait and end the war, with nuclear talks postponed for a later stage, Axios reported, citing people it didn’t name including a US official. Trump is expected to hold a meeting on Monday with his top national security and foreign policy team to discuss the stalemate, it said. 

The US president on Saturday told his envoys Jared Kushner and Steve Witkoff to skip the trip to Pakistan, and later told reporters that Iran “offered a lot, but not enough.” Iranian President Masoud Pezeshkian said his nation won’t enter “imposed negotiations under threats or blockade.”

The Iran war, now in its ninth week, has driven up energy prices and led to shortages of key products such as liquefied petroleum gas in India. The International Energy Agency says the conflict is causing the biggest supply shock in history.

The longer Hormuz is closed, the more consumption is going to have to recalibrate lower to align with a drop of at least 10% in supply, according to traders. A loss of 1 billion barrels is already all but guaranteed — more than double the emergency inventories that governments released after the conflict. 

So-called demand destruction, such as airlines cutting back on the number of scheduled flights, is likely to spread. 

US forces intercepted a sanctioned vessel in the Arabian Sea on Saturday as part of the blockade, according to US Central Command. A Navy helicopter was deployed to intercept the vessel, which subsequently complied with military directions to turn back to Iran under escort. A total of 38 ships have been redirected since the start of the blockade, Centcom said.

Most of Iran’s crude is exported to China, with the country’s private refiners — known as teapots — taking advantage of the cheaper barrels. On Friday, the US sanctioned Hengli Petrochemical (Dalian) Refinery Co. over its links to Tehran, just weeks ahead of an expected summit between Trump and Chinese President Xi Jinping. Hengli has denied any trade with Iran.

“This combination is unstable in a particular way,” said Martijn Rats, global oil strategist at Morgan Stanley. “Every day the current situation persists, the oil market tightens, putting upward pressure on prices. On the other hand, if a peace deal were to be announced soon, oil supply could improve and part of the risk premium in prices could dissipate.”

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Published on April 27, 2026