Oil prices have surged amid a pause in U.S.-Iran talks: what’s happening in the market
2 June 10:55
Global oil prices surged following reports that indirect talks between Iran and the U.S. had been suspended. The Iranian news agency Tasnim stated that Tehran was halting communications with Washington and was also considering blocking the Strait of Hormuz. Against this backdrop, oil prices surged, and the market once again began discussing the risk of a major energy crisis in the Middle East. This was reported by "Komersant Ukrainian", citing Reuters.
At the same time, on June 2, the market partially reversed its gains following statements by U.S. President Donald Trump that negotiations with Iran are continuing.
According to the agency, Brent fell by 0.79% to $94.23 per barrel, and WTI by 0.92% to $91.31, although the day before both benchmark grades had gained more than 5%.
Why oil prices surged
The main trigger for the market was news that Iran is suspending indirect contacts with the U.S. amid Israeli military operations in Lebanon. Reuters, citing Tasnim, reported that Tehran is considering not only freezing contacts but also more severe measures, including a complete blockade of the Strait of Hormuz and the possible mobilization of allied forces in the Bab el-Mandeb Strait area. This is precisely what triggered the spike in oil prices.
According to Bloomberg, Brent briefly rose to nearly $95 per barrel, while WTI traded near $92.
The market reacted very quickly, as news about the Strait of Hormuz is of critical importance to oil traders.
Why the Strait of Hormuz is so important
The Strait of Hormuz is one of the key routes for global oil trade. About one-fifth of global oil and liquefied natural gas supplies pass through it. That is why any threat of a blockade of this corridor instantly affects Brent and WTI prices and triggers a nervous market reaction.
Reuters notes that even restrictions on shipping through the Strait of Hormuz are already causing heightened market turbulence. If disruptions persist, this could lead to significant supply losses and another spike in prices.
What Trump said about negotiations with Iran
Despite Tasnim’s report, U.S. President Donald Trump stated that negotiations with Iran have not broken down. Reuters reported that he confirmed ongoing talks and expressed optimism about a potential deal that could preserve the truce and pave the way for the reopening of the Strait of Hormuz. It was following these remarks that part of the rise in oil prices was lost.
Thus, the market received conflicting signals: on the one hand, reports from Iranian media about a pause in talks; on the other, Trump’s assurances that dialogue is continuing. It is this uncertainty that remains the main factor of instability in the oil market.
Watch us on YouTube: important topics – without censorship
What analysts are forecasting
Citi analysts believe that this week could see either the signing of a memorandum or an extension of the current ceasefire. At the same time, they warn that if the negotiations fail, the market could quickly shift to a scenario of prolonged supply disruptions.
If the Strait of Hormuz remains blocked for another month, total losses could reach about 1.3 billion barrels, and prices in the second quarter of 2026 could approach $110 per barrel.
Societe Generale noted that the current price surge has already reduced oil demand by approximately 3%. They also believe that risks remain skewed toward greater losses if the normalization of supplies is delayed, and a full market recovery is only possible closer to the end of 2026.
What this means for the global economy
Rising oil prices due to tensions between the U.S. and Iran immediately impact fuel costs, logistics, transportation, and production expenses. When the market fears disruptions in the Middle East, this increases inflationary risks and puts additional pressure on economies dependent on energy imports.
For countries that rely on imported oil and petroleum products, such spikes mean higher prices for gasoline, diesel, transportation, and some consumer goods. That is why even a brief pause in negotiations between the US and Iran immediately becomes global economic news.
Read us on Telegram: important topics – without censorship
