NEW YORK, April 27 — Oil prices increased by about 2% on Monday, reaching a two-week high. This rise came as peace talks between the U.S. and Iran stalled, while shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.
Brent crude futures rose by $2.16, or 2.1%, to $107.49 a barrel at 10:01 a.m. EDT (1401 GMT). Meanwhile, U.S. West Texas Intermediate (WTI) crude increased by $1.32, or 1.4%, to $95.72.
This marks the sixth consecutive day of gains for Brent, the first such streak since March 2025, and it is on track for its highest closing price since April 7.
Despite challenges in face-to-face diplomacy after U.S. President Donald Trump canceled a trip by his envoys, work continues to bridge the gaps between the United States and Iran, according to sources from mediator Pakistan. Trump mentioned that Iran should initiate contact if it seeks a deal.
“The ongoing diplomatic deadlock means that every day, 10-13 million barrels of oil are not reaching the international market, which worsens the already tight oil balance. This suggests that oil prices will continue to rise,” said Tamas Varga, an analyst at PVM Oil Associates.
In the past 24 hours, at least seven ships, mostly dry bulk carriers, have crossed the Strait of Hormuz, which is consistent with the low activity observed in recent days. This is only a small fraction of the average 140 daily crossings that were normal before the Iran war began on February 28, when around 20% of the world’s oil supplies flowed through the Strait.
The European Central Bank (ECB) is set to meet on Thursday. A potential ceasefire in the Iran conflict may ease the pressure for an immediate interest rate hike.
However, the unclear status of peace talks and the lack of indications that the Strait of Hormuz will reopen soon lead traders to expect that high oil prices will drive up inflation and compel the ECB to raise interest rates later this year.
Central banks, including the ECB, utilize interest rates to manage inflation. Higher interest rates increase borrowing costs for consumers, which can slow economic growth and decrease oil demand.
Goldman Sachs has raised its oil price forecasts for the fourth quarter to $90 a barrel for Brent and $83 for WTI, citing reduced output from the Middle East.
“The economic risks are greater than what our crude base case suggests, considering the potential upside for oil prices, unusually high refined product prices, risks of product shortages, and the unprecedented scale of the current situation,” GS analysts led by Daan Struyven said in a note on Sunday.
U.S. gasoline futures closed on Friday at their highest levels since July 2022, which increased the gasoline crack spread, a measure of refining profit margins, to its highest since July 2022.
Additionally, the ceasefire between Israel and Lebanon is also showing signs of instability.
The Israeli military has started conducting strikes in eastern Lebanon on Monday, expanding its bombing campaign during a ceasefire that has not fully stopped hostilities with the Iran-backed Lebanese group Hezbollah.