Crude oil prices hit $104 as US ceasefire and Iran goes on ‘life support’

Crude oil prices hit $104 on Monday as the United States and Iran failed to agree on a deal to end conflict in the Middle East.

Brent crude futures traded 2.7 percent higher at around $104 a barrel as the standoff put the Strait of Hormuz under heavy pressure. Before the war started on February 28, crude oil was trading below $70 per barrel. The narrow waterway, which once carried a fifth of the world’s oil and liquefied natural gas, has now become a major pressure point in the conflict.

US President Donald Trump said on Monday a ceasefire with Iran was “on life support” after he rejected Tehran’s response to a US peace proposal, sparking fears of a resumption of hostilities in the 10-week conflict that has killed thousands of people and disrupted vital energy flows following rising tensions around the Strait of Hormuz.

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According to reports, days after the US submitted a proposal aimed at reopening negotiations, Iran on Sunday issued a response focused on ending the war on all fronts, including Lebanon, where US ally Israel is fighting Iranian-backed Hezbollah militants. The response was quickly rejected by Trump.

When asked about the ceasefire’s position, Trump told reporters on Monday, “I would call it the weakest ceasefire to date, after reading the garbage they sent us. I haven’t even finished reading it yet,” he said.

Meanwhile, three tankers carrying crude oil exited the Strait of Hormuz last week and on Sunday, with trackers turned off to avoid an Iranian attack, shipping data from Kpler and LSEG showed on Monday.

Two very large crude carriers, the Agios Fanourios I and Kiara M, each carrying 2 million barrels of Iraqi crude, passed through the strait on Sunday, data showed.

Agios Fanourios I was heading to Vietnam to unload its cargo at the Nghi Son Refinery and Petrochemical facility on May 26, according to data. The tanker failed to transit the strait in at least two previous attempts since loading Basrah medium crude oil on April 17, Reuters reported.