WASHINGTON (dpa-AFX) - After the previous session's tailspin, crude oil has catapulted on Monday after the U.S. seizure of an Iranian cargo ship threatened the ongoing ceasefire, with Iran vowing to retaliate, which renewed supply-related concerns.
WTI Crude Oil for May month delivery was last seen trading up by $5.54 (or 6.61%) at $89.39 per barrel.
Earlier this month, U.S. President Donald Trump announced a two-week ceasefire in the U.S.-Iran war.
During this ceasefire period, U.S. and Iranian delegations met in Islamabad, Pakistan, to discuss the future course of action to formulate a strategy for peace talks.
However, the talks were termed as 'a failure' by Trump following which he ordered U.S. naval forces to block all ships transiting to and from Iranian ports across the Strait of Hormuz.
Trump's aggressive stance pushed oil prices higher once again, with demand concerns rising due to possible long-term supply disruption.
Again, days before, Trump confirmed a second round of peace talks to happen again in Pakistan, which eased supply-side concerns as expectations of reopening of the Strait of Hormuz grew bigger.
However, Trump insisted that the naval blockade would continue until Iran reaches an agreement with the U.S.
Earlier on Sunday, Trump confirmed that U.S. Vice President JD Vance would lead a team to Pakistan for restarting the negotiations.
Later, through his social media post, Trump announced that U.S. forces have intercepted an Iranian-flagged cargo vessel, Touska, after it failed to respond to 'fair warning calls' sent from the U.S. Navy guided missile destroyer USS Spruance to halt, which compelled the U.S. navy to blow a hole in its engine room.
Trump added that 'Touska' is one of the ships sanctioned by the U.S. Treasury due to its links to illegal activity and asserted that the vessel is under U.S custody.
Not taking the U.S. move lightly, Iran called the U.S. acts of attacking and boarding their ship, 'a violation of ceasefire' and an act of 'armed piracy,' to which it vowed to strongly retaliate.
Trump threatened to 'knock out' every single power plant in Iran and every single bridge if the Iranian regime does not agree to a deal.
Reuters and the New York Post quoted unnamed Iranian officials as stating that Iran is considering attending the talks.
With the war-threat returning and uncertainty prevailing over the existing ceasefire and the future of peace talks, crude oil prices catapulted again, raising inflationary concerns.
Analysts estimate that over 600 million barrels of crude oil lay stranded at sea behind the strait.
Since last Thursday, Israel and Lebanon have agreed to halt attacks after envoys of both nations met earlier in the U.S. to find ways to end their conflict.
Today, Reuters reported that both the nations are set to conduct the second round of negotiations in Washington, likely on Thursday.
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