The price of a barrel of oil rose above $100 again on Monday. This comes after peace talks between the United States and Iran ended without a breakthrough on Sunday, and after US President Donald Trump ordered a blockade of Iranian ports in the Strait of Hormuz.
Shortly after the opening of Asian trading, the price of a barrel of the benchmark Brent crude oil rose by seven percent to $102. Shares also appeared to fall in Asia, and US S&P 500 futures fell about 1.1 percent in early trading.
Futures are financial contracts where you agree to buy or sell a share at a fixed price at a time in the future. They can be traded outside stock exchange hours and therefore provide an early warning of where the market will go when it reopens.
Last week, oil prices fell, while stock prices rose, when Trump agreed to a two-week ceasefire brokered by Pakistan.
Uncertain ceasefire
However, it quickly became clear how fragile the agreement was, as Israel continued its attacks on Lebanon, while the Strait of Hormuz remained de facto closed. The negotiations in the Pakistani capital, Islamabad, ended with US Vice President J.D. Vance, who led the US delegation, leaving Pakistan without an agreement.
Iran and the US have subsequently both accused each other of being the reason for the breakdown of the negotiations. The two parties also disagree on how long the negotiations lasted. Vance said they lasted 21 hours, while an Iranian Foreign Ministry spokesman said they lasted between 24 and 25 hours.
The Strait of Hormuz is a maritime bottleneck for a fifth of the world's gas and oil transport, and the closure of the strait has led to rising energy prices.
Trump said on Sunday that oil and gasoline prices could remain high during the US midterm elections in November, a rare acknowledgement of the potential political fallout of the war.
/ritzau/Reuters
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