Oil prices jumped Monday, with Brent crude topping $94 per barrel and WTI climbing above $90, after President Donald Trump sent a proposed Iran peace agreement back for revisions, raising fresh questions about how quickly the Strait of Hormuz can be fully reopened to global energy shipments. Brent was trading at $94.23 per barrel while WTI stood at $90.87 at 6:06 a.m. ET, according to multiple reports. The moves came amid reports that Tehran may halt US negotiations, amplifying supply fears.
Supply tightness remains a central theme, though demand destruction from higher prices is beginning to offset some shock risks. Goldman Sachs commodity analysts noted that actual end-use oil demand may have fallen more than expected in response to elevated prices. “We see significant upside price risks from potentially more persistent Mideast supply losses but also meaningful price downside from weaker demand,” the team said, as quoted by Bloomberg. The investment bank estimates the extent of demand destruction has already begun to soften the blow from physically tighter markets.
Meanwhile, Guyana has emerged as an unexpected oil winner amid the conflict. In just seven years, the South American nation has become one of the fastest-growing oil exporters, with nearly 1 million barrels per day of production capacity. Since ExxonMobil launched production from the offshore Stabroek block in 2019, the country’s economy has quadrupled. Oil revenues and royalties have boosted state coffers and GDP linked with oil-related activities, transforming what was one of the poorest nations in the region.
The geopolitical landscape remains volatile. According to well-placed sources in Washington, Tehran, and London, the sound and fury of recent weeks may ultimately amount to little significant change. One source said it is “pretty likely that we’ll wind up with the same sort of deal we had in the JCPOA.” Nevertheless, Trump’s demand for stronger language on Iran’s nuclear commitments has injected fresh uncertainty into the negotiations, keeping markets on edge regarding the Strait of Hormuz's full reopening.
Transition dynamics highlight the delicate balance between supply disruptions and demand erosion. As the Iran deal stalls, higher prices risk accelerating energy transition investments, yet near-term dependency on fossil fuels remains entrenched. The outcome of US-Iran talks will likely determine whether oil markets tighten further or face a demand-led correction.