Global oil prices rallied sharply on Monday after reports indicated that Iran may suspend indirect negotiations with the United States and consider measures that could affect traffic through the Strait of Hormuz, one of the world's most important oil shipping routes.
The developments heightened concerns across energy markets, pushing crude benchmarks to multi-month highs as traders assessed the risk of a broader escalation in Middle East tensions.
Brent crude, the international benchmark, rose about 6.6 percent to trade above $95 per barrel, while U.S. West Texas Intermediate (WTI) crude gained roughly 7.7 percent to around $93 per barrel amid fears of potential supply disruptions.
According to reports carried by Iranian state-linked media, Tehran is considering suspending message exchanges with Washington through intermediaries following disagreements over regional security issues and ongoing conflicts involving Iranian-backed groups in the Middle East.
The reports said Iranian officials are dissatisfied with recent developments linked to military operations in Lebanon and Gaza and have tied future diplomatic engagement to broader regional conditions.
State-affiliated media also reported that Iran and its regional allies were discussing measures that could affect maritime routes, including the Strait of Hormuz and the Bab el-Mandeb corridor, both of which are critical to global energy supplies.
The Strait of Hormuz is among the world's most strategic energy chokepoints, handling about 20 percent of global oil shipments and significant volumes of liquefied natural gas exports from Gulf producers.
Analysts have warned that any threat to navigation through the waterway could have immediate consequences for global energy markets, as traders factor additional geopolitical risk into crude prices.
The latest market reaction comes as efforts continue to secure a broader diplomatic agreement between Washington and Tehran.
Reports indicate that discussions remain focused on key issues, including Iran's nuclear programme, sanctions relief, security guarantees and arrangements related to freedom of navigation through major maritime corridors.
While U.S. officials have continued to express optimism about the prospects for an agreement, reports suggest negotiations remain difficult and unresolved.
Recent proposals under discussion reportedly include a temporary ceasefire framework, measures aimed at ensuring uninterrupted shipping through the Strait of Hormuz and a roadmap for future nuclear negotiations.
However, major differences remain over issues such as the management of Iran's enriched uranium stockpile, the scope of sanctions relief and enforcement mechanisms for any final agreement.
Over the weekend, U.S. President Donald Trump expressed confidence that a diplomatic breakthrough remains possible, saying Iran continues to show interest in reaching an agreement while reiterating that preventing Tehran from acquiring a nuclear weapon remains a key U.S. objective.
Iranian officials, however, signalled a more cautious stance on Monday.
Foreign Ministry spokesperson Esmaeil Baqaei reportedly said discussions on the technical aspects of Iran's nuclear programme were not currently taking place, adding that ending the ongoing conflict remains Tehran's immediate priority.
Despite the differing public positions, reports from Iranian media suggest both sides continue to exchange revisions to draft proposals, indicating diplomatic engagement has not completely broken down.
For oil markets, the immediate focus remains the potential impact on global supply routes.
With the Strait of Hormuz carrying a substantial share of internationally traded crude oil, any indication of disruption is likely to maintain upward pressure on prices and increase geopolitical risk premiums across energy markets.