Oil prices rose to the highest level in three weeks as markets reacted to ongoing tensions between the United States and Iran over a proposed deal linked to the Strait of Hormuz. Brent crude moved above $111 a barrel, while West Texas Intermediate traded near $98.
The move followed uncertainty around a peace proposal and continued restrictions on shipping routes. Officials in Washington reviewed Iran’s latest offer but maintained strict conditions tied to nuclear activity and security concerns.
Energy traders monitored the situation closely as supply risks remained elevated. Shipping activity through the Strait of Hormuz stayed heavily reduced, which limited flows of crude oil and liquefied natural gas.
Brent crude climbed above $111 a barrel during early trading, marking the highest level in three weeks. West Texas Intermediate also increased, moving close to $98 a barrel. The gains followed reports that the United States was reviewing a proposal from Tehran aimed at easing tensions and reopening key shipping lanes.
White House officials stated that discussions were ongoing but noted strict conditions. Press Secretary Karoline Leavitt said President Donald Trump had reviewed the proposal with his security team. She said, “His red lines with respect to Iran have been made very, very clear,” while indicating further responses would follow soon.
US Secretary of State Marco Rubio also raised questions about Iran’s offer. He said, “There are still questions about whether the person submitting it had the authority to submit that offer,” pointing to uncertainty in the negotiations. He added that nuclear concerns remained central to the talks.
Shipping through the Strait of Hormuz remained severely restricted, with traffic levels close to zero for several weeks. The situation followed naval blockades and security actions that reduced the movement of tankers carrying oil and gas. Iran-linked vessels were also affected, with reports of changes in course after interception attempts in the Indian Ocean.
The Strait handled around one-fifth of global oil and gas shipments before the disruption. Reduced traffic has limited supply from major producers in the Gulf region. Iranian media reported that Tehran’s foreign minister would communicate through mediators that easing restrictions could depend on lifting the blockade and setting new transit rules.
US officials maintained that security conditions in the region had not improved. Talks continued through indirect channels, but no agreement had been reached. Markets continued to monitor shipping activity closely as supply uncertainty remained in place.
Rising oil prices affected global bond markets as investors adjusted expectations for inflation. Higher energy costs raised concerns about price pressure across major economies. Government bond yields increased in the United States, Europe, and the United Kingdom during early trading sessions.
In the UK, the 10-year gilt yield moved above 5%, reaching its highest level since March. Longer-term 30-year yields also climbed closer to multi-decade highs. In the United States, 10-year Treasury yields rose to 4.36%, while German Bund yields increased to 3.08%.
Market analysts linked the movement to energy supply risks. Deutsche Bank research head Jim Reid said, “Markets have been latching on to any signs of peace talks, and the absence of that is raising fears that they are not going to happen.”
Another market view noted, “questions remain about whether negotiations can lead to stable supply conditions,” reflecting ongoing uncertainty in energy and financial markets.
Also Read: Stock Market Update: Nifty 50, Sensex Likely to Open Higher Amid Rise in Oil Prices