Oil prices rise again on Monday and this time the trigger is diplomatic, not military. A planned second round of US-Iran peace talks in Islamabad collapsed over the weekend before it even began, sending Brent crude above $107 per barrel and reminding markets just how fragile the ceasefire truly is.
The Strait of Hormuz disruption continues with no resolution in sight. The oil market surge on Monday morning reflected one simple reality: when US-Iran peace talks fail, oil goes up. And right now, talks have failed.
What Happened Over the Weekend
Trump cancelled a planned visit to Islamabad by his envoys Steve Witkoff and Jared Kushner on Saturday, citing what he described as “tremendous infighting and confusion” within Tehran’s leadership. The cancellation came after Iran’s Foreign Minister Abbas Araghchi arrived in Islamabad but departed before any direct engagement could take place with the US side. Iran responded by reiterating its position it will not negotiate while being threatened or while the US naval blockade on its ports remains in place. The breakdown sent an immediate signal to energy markets that the global oil supply crisis is far from over, triggering the fresh oil prices rise seen at the start of the trading week.
Brent Crude and WTI Where Prices Stand
The oil market surge on Monday pushed Brent crude up as much as 2.5% to $107.97 per barrel in early trading before easing slightly to $106.99 as of midday GMT. West Texas Intermediate traded near $96 per barrel. Both benchmarks have now risen more than 36% since the conflict began on February 28, with Brent having touched a high of $131 per barrel at the peak of the Strait of Hormuz crisis in March. The oil prices rise seen Monday reflects a market that had briefly priced in diplomatic progress and is now repricing for prolonged disruption. Asian stock markets, however, largely shrugged off the oil move, with Japan’s Nikkei and South Korea’s KOSPI both opening higher on optimism about other economic factors.
Strait of Hormuz Disruption Still the Core Problem
The Strait of Hormuz disruption remains the defining variable in the global energy market. The waterway, which normally carries around 20% of the world’s oil and 19% of global LNG supplies, has been effectively closed since late February 2026. The International Energy Agency has described the closure as the “largest supply disruption in the history of the global oil market.” On Monday, shipping traffic through the strait remained at a fraction of pre-war levels, with Iran’s IRGC maintaining active enforcement of its blockade of commercial vessels. The US simultaneously maintains its naval blockade of Iranian ports creating a dual-blockade situation that has trapped hundreds of tankers and left global inventories drawing at a record pace.
Goldman Sachs Raises Oil Forecast
Wall Street’s most closely watched commodity desk moved on Monday in response to the stalled US-Iran peace talks. Goldman Sachs raised its Brent crude forecast to $90 per barrel for Q4 2026 up from its previous estimate of $80 in a note published April 27. The bank described global inventory draws as “extreme,” running at 11 to 12 million barrels per day in April alone. Goldman analysts noted the Q4 figure is now nearly $30 higher than before the Hormuz shock, and said delayed normalisation of Gulf exports now not expected until end-June at the earliest is tightening supply sharply. The bank also raised its US inflation forecast and increased its recession probability by five percentage points, to 25%. The oil market surge trajectory, Goldman warned, is being driven by genuine physical disruption not speculation.
Global Oil Supply Crisis Who Is Hit Hardest
The global oil supply crisis triggered by the Strait of Hormuz disruption is hitting different regions in very different ways. Asia bears the sharpest immediate pain, as countries like Japan, South Korea, India, the Philippines, Bangladesh, and Pakistan rely most heavily on Gulf oil imports. The Philippines declared a national energy emergency in March. India raised export duties on diesel and aviation fuel to protect domestic reserves. Pakistan saw petrol prices hit an all-time high of Rs458 per litre before emergency government cuts following the initial ceasefire. In Europe, natural gas prices have surged, with Goldman estimating Dutch TTF gas could approach 74 EUR per MWh if LNG flows remain halted. Gulf states themselves face a dual crisis not just oil revenue losses but food security emergencies, as more than 80% of their caloric intake also transits the strait.
Iran’s New Proposal A Potential Opening
Despite the weekend breakdown, the US-Iran peace talks are not entirely dead. Iran sent a new proposal to the US on Monday, suggesting the Strait of Hormuz could be reopened and the war formally ended with nuclear talks deferred to a separate, later process. The proposal, reported by multiple diplomatic sources, represents a potential shift in Iran’s previously all-or-nothing stance. Trump acknowledged the development but stopped short of welcoming it, saying Iran could telephone Washington if it wants to negotiate. Pakistan’s mediation team continues to work both sides, and Araghchi’s brief return to Islamabad on Sunday despite not meeting the US delegation signals Tehran has not fully walked away. The oil prices rise could reverse quickly if this new Iranian proposal gains traction in the coming 48 hours.
Crude Oil Price Forecast for Next Week
The near-term oil prices rise trajectory depends almost entirely on whether the US-Iran peace talks resume. If Iran’s new proposal is accepted and a framework for reopening the Strait of Hormuz is agreed, analysts expect Brent to fall sharply toward the $85 to $90 range. If talks collapse entirely and the May 1 War Powers deadline forces a US military decision, Oxford Economics has modelled scenarios where Brent hits $140 per barrel a level it describes as a potential breaking point for the global economy. The base case among most forecasters is continued range-trading between $95 and $110 while diplomatic uncertainty persists. The global oil supply crisis has now lasted nearly two months, and every week without a Hormuz resolution deepens the structural damage to energy markets worldwide.
Frequently Asked Questions
Oil prices rise today why are they going up again?
Oil prices rise on Monday April 27 because planned US-Iran peace talks in Islamabad collapsed over the weekend. Trump cancelled his envoys’ trip to Pakistan after Iran’s foreign minister left without meeting the US delegation. The Strait of Hormuz disruption continues with no resolution in sight, and markets are pricing in a longer period of supply tightness. Brent crude rose above $107 per barrel and WTI traded near $96 in early Monday trading.
Brent crude oil price what is the Goldman Sachs forecast?
Goldman Sachs raised its Brent crude forecast to $90 per barrel for Q4 2026 on April 27, up from a previous estimate of $80. The bank cited the “extreme” pace of global inventory draws running at 11 to 12 million barrels per day and said delayed normalisation of Gulf oil exports, now not expected until end-June, is creating sustained market tightness. Goldman noted its Q4 Brent target is now nearly $30 higher than before the Hormuz shock, reflecting a view that the global oil supply crisis will persist longer than initially assumed.
Oil price per barrel today what is driving the oil market surge?
The oil market surge is being driven by a combination of physical supply disruption and diplomatic failure. The Strait of Hormuz disruption has removed around 20% of global seaborne oil supply from the market since late February. The US-Iran peace talks breakdown over the weekend removed the most immediate catalyst for a price reversal. Goldman Sachs, the IEA, and Oxford Economics all describe the current disruption as historically unprecedented in scale, with the IEA calling it the “largest supply disruption in the history of the global oil market.” Prices will remain elevated until a credible framework for reopening the strait is agreed.
