The reopen delivered exactly what the standoff promised. Brent crude surged more than 3 percent past $107 a barrel on Monday as Donald Trump's rejection of Iran's Hormuz plan and Tehran's refusal to soften its terms pushed any reopening further away.
Brent neared $108 during Asian trading before easing to $107.35 ahead of the London morning, reversing Friday's 2.14 percent slide to $104.32 that had been priced on reopen optimism. WTI climbed toward $94, up nearly 2 percent on the day, Al Jazeera reported.
Related reading: Iran awaits US answer as oil braces for Sunday reopen at $104.37; Iran refuses to soften demands after Trump rejects Hormuz deal.
Overplayed hand, open door
Trump told Axios on Sunday that Tehran's conditions resembled terms Washington might have accepted about a year ago, accusing Iran of overplaying its hand, while adding that he expects negotiations to resume this week. The market heard the insult louder than the invitation.
Iran, for its part, says it is still waiting for a definitive American answer through Qatari and Pakistani mediators and will not ease its conditions: frozen funds released, sanctions lifted and the naval blockade ended in exchange for a seven-day reopening and a return to nuclear talks, Vantage reported.
The waterway that prices everything
Before US and Israeli strikes in late February, about one-fifth of global oil supply flowed through the Strait of Hormuz. Commercial traffic has collapsed since, with attacks on Gulf vessels mostly blamed on Iran or allied groups. Every weekly candle now trades the strait first and fundamentals second.
Middle East oil exports did rebound to 12.8 million barrels a day, a reminder that barrels are still moving around the chokepoint, but the market is paying up for the risk that they stop.
Diesel ban enters the frame
Trump added a second supply threat, telling Fox News on Sunday the White House is weighing a diesel export ban "very seriously" as US fuel prices soar ahead of November's midterms. Options range from a full 90-day ban to incremental limits, CNBC reported.
Goldman's Daan Struyven warned a ban would fill domestic storage, push refiners to cut runs and shrink gasoline supply, lifting pump prices instead. Europe, already cut off from Russian and Middle East flows, would take the hardest hit.
What to watch
- $108: the Asian high is now the line; a break opens the way to April's $126 area
- This week's talks: Trump's promised resumption is the only scheduled off-ramp
- The mediators: Qatar and Pakistan still carry the definitive US position
- Diesel decision: any ban headline reprices refined products instantly