Oil prices extend gains after Iran suspends talks with the US

Oil prices are rising more sharply after Iranian state media reported Iran had suspended talks with the United States, dashing hopes that a deal towards ending the war could be agreed in the coming days.

Brent crude, the global oil benchmark, gained 6% to trade at $97.02 a barrel shortly before 10 a.m. ET. West Texas Intermediate, the US benchmark, climbed around 7.5% to $93.93 a barrel for delivery in July.

The latest moves come after hopes for a US-Iran deal had sent Brent crude down 19.3% in May, its biggest monthly decline since March 2020 when pandemic lockdowns began, according to Deutsche Bank analysts.

Brent is still well below the high of $114 a barrel at which it settled on April 5, but roughly 25% higher than it was just before the US and Israel attacked Iran.

“Anything under $100 (a barrel) is pricing a good outcome,” Neil Wilson, a strategist at investment bank Saxo wrote in a note.

Earlier Iran’s semi-official Tasnim news agency reported, Iran suspended talks with the United States in protest over Israel’s actions in Lebanon.

“Given the continuation of the Israeli regime’s attacks in Lebanon, and considering that Lebanon had been one of the preconditions for a ceasefire — which has now been violated on all fronts, including Lebanon — the Iranian negotiating team is suspending ‘talks and exchanges of texts through mediators,’” Tasnim reported.

Iran called for the immediate halt of Israel’s wars in Gaza and Lebanon, along with the Israeli army’s full withdrawal from Lebanon, Tasnim said, adding that “until Iran’s and the resistance’s position on these matters is satisfied, there will be no negotiations.”

Tasnim added that Tehran and allied militant groups in the region have placed on their agenda the “complete closure of the Strait of Hormuz and the activation of other fronts,” including the Bab el-Mandeb strait at the southern end of the Red Sea, where Yemen’s Iran-backed Houthi rebels have previously launched attacks on passing vessels.

Earlier on Monday, Israeli Prime Minister Benjamin Netanyahu instructed the Israeli military to strike Beirut’s Dahieh district, the city’s southern suburb that is a Hezbollah stronghold. An Israeli official told CNN that plans to strike Beirut were coordinated with the US.

Source: CNN
-- Agencies