Brent tops $107 after US‑Iran peace talks stall, sparking risk‑off flows

Brent crude topped $107 a barrel early Monday after planned U.S.-Iran talks in Pakistan fell apart over the weekend. (cnbc.com) President Donald Trump canceled plans to send Steve Witkoff and Jared Kushner to Islamabad, saying Saturday that talks could happen by phone instead. Iran’s Foreign Ministry spokesperson Esmaeil Baqaei then said no meeting between Tehran and Washington was planned. (cnbc.com) By 6:13 a.m. Eastern on Monday, Brent for June delivery was up 2.4% at $107.89 a barrel, while West Texas Intermediate gained 2.2% to $96.47. U.S. stock futures were softer at the same time, with Dow futures down 75 points and S&P 500 futures off almost 0.1%. (cnbc.com 1) (cnbc.com 2) The immediate issue is the Strait of Hormuz, the narrow shipping lane between Iran and Oman that carries a large share of the world’s seaborne crude. When traders think fewer tankers will get through, they bid up oil because refiners may have to compete for fewer available barrels. (news.un.org) (commonslibrary.parliament.uk) That bottleneck has stayed central because the ceasefire announced on April 8 did not restore normal traffic through the strait. Commonwealth Bank of Australia said on April 24 that about 20 million barrels of oil and petroleum products had moved through Hormuz each day before the war. (cnbc.com) (news.un.org) Tensions rose again after Iran’s Revolutionary Guard reportedly boarded two cargo ships near the strait, adding to fears that shipping disruptions could last longer. ING commodities strategist Warren Patterson said Monday that the failed push to restart talks was erasing hopes for a near-term resumption of energy flows. (cnbc.com) Even with talks stalled, diplomacy did not disappear. CNBC reported Monday that Iran had offered a new proposal, via Pakistani mediators, to reopen the strait and end the war while pushing nuclear negotiations to a later stage. (cnbc.com) (axios.com) That left markets trading two timelines at once on April 27: tighter oil supply in the near term, and a possible diplomatic off-ramp later. Until ships move more freely through Hormuz, crude prices will keep reacting first to military and diplomatic headlines. (cnbc.com) (axios.com)