Oil prices rose and stocks were mixed on Monday after President Trump called off a trip to Pakistan by two of his top negotiators for a new round of peace talks with Iran.
His latest change of heart leaves the countries locked in a stalemate, still under a cease-fire agreement but without a clear path to ending the war.
In the meantime, the United States and Iran are trying to inflict economic damage on each other by strangling shipping through the Strait of Hormuz, a vital shipping artery that connects the Persian Gulf to buyers around the world.
Oil prices rise.
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The price of Brent crude, the global benchmark for oil, rose more than 2 percent, gaining momentum in early trading. That brought the price of a contract for June delivery to about $108 a barrel, while the contract for July rose to roughly $102 a barrel. The war has made it difficult for buyers to secure oil, and many are willing to pay a premium for supplies that they can get sooner.
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West Texas Intermediate crude, the U.S. benchmark, which still references its June contract, rose more than 2 percent to above $96 a barrel.
Stocks tread water.
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Futures on the S&P 500 have wavered ahead of the open for trading in the United States on Monday, shifting between small losses and gains. The index rose about half a percent last week, recording four weekly gains in a row since October 2024, in the run-up to the presidential election.
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Stocks in Asia, where countries import vast quantities of oil and gas, were mixed. South Korea’s benchmark Kospi index and Taiwan’s Sensex index rose more than 2 percent. Japan’s Nikkei 225 rose about 1 percent but Hong Kong’s Hang Seng slipped slightly.
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In Europe, stocks were subdued. The Stoxx 600, a broad index that tracks the region’s largest companies, was flat, and the DAX in Germany gained 0.3 percent.
Gasoline prices rise.
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Gas prices rose again on Monday, to a national average of about $4.11 a gallon, according to the AAA motor club. That means drivers are paying about 37 percent more for gasoline than they were when the war started at the end of February. But prices remain several cents below recent highs hit earlier this month.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.
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Diesel prices have increased even more quickly and stood at $5.46 on Monday, up around 45 percent since the start of the war.
What they are saying: ‘Higher prices and net upside risks’
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Analysts at Goldman Sachs upgraded their forecasts for oil prices, revising their expectations for a “normalization” of exports from the Persian Gulf by the end of June, from mid-May previously. They now expect Brent crude to hover around $90 a barrel at the end of the year — up from a recent call for $80 and well above a prewar forecast of just above $60.
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Persistently higher energy prices risk doing economic damage, with demand for oil falling as businesses and households cut back their consumption. Goldman’s analysts estimate that global oil demand will fall by 1.7 million barrels per day in the current quarter, and “even sharper demand losses could be required if the supply shock persists longer.”
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