Oil prices have risen after plans for a second round of peace talks between the US and Iran stalled again.
Brent, the global benchmark, rose by around 2% to $109.33 (£80.72) a barrel, while US-traded crude also increased by 2% at $96.78.
US President Donald Trump said on Saturday that Washington had cancelled plans to send a team to Pakistan for negotiations with their Iranian counterparts.
Global energy supplies have been under intense pressure since the start of the Iran war, as the crucial Strait of Hormuz waterway has been effectively closed by the conflict.
Iranian Foreign Minister Seyed Abbas Araghchi said on Sunday that “important discussions on bilateral matters and regional developments” were ongoing with Oman, its neighbour along the strait.
He posted on social media: “Our focus included ways to ensure safe transit that is to benefit all dear neighbors and the world. Our neighbors are our priority.”
Araghchi arrived in St Petersburg on Monday “with the aim of meeting and holding talks with Russian President Vladimir Putin,” Iranian state-run news agency Irna reported.
Around a fifth of the world’s crude oil and Liquified Natural Gas (LNG) usually passes through the Strait of Hormuz.
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Brent crude has risen by more than 10% since Trump announced last week that he would extend a ceasefire with Tehran to give its leadership a chance to present a “unified proposal”.
Sophie Huynh, a portfolio manager and strategist at BNP Paribas, said the ongoing closure of the strait could affect the price of everything from “bin bags to medicine”.
“I think we’re underestimating the extent of which products could be affected by the oil shortage,” she told the BBC’s Today programme.
“We’re not consuming crude, we’re consuming products.”
If the strait remains closed for more than a few weeks, the effects will be “really far reaching in terms of supply chain,” she said.
Oil traders appear to be less reactive to the latest headlines and are waiting for “credible” evidence of the conflict easing, said economics lecturer Goh Jing Rong from the Singapore Management University.
