Oil prices rallied again on Monday, a day after U.S. President Donald Trump said that Iran's response to Washington's proposal was "unacceptable," extending concerns over supplies as the Strait of Hormuz stayed largely closed, which kept the global market tight.
Brent crude futures climbed $4.04 or 3.99% to $105.33 a barrel at 06:14 GMT. U.S. West Texas Intermediate (WTI) was at $99.85 a barrel, up $4.43, or 4.64%.
Last week, both contracts recorded 6% weekly losses on hopes for an imminent end to the 10-week-old conflict that would allow oil transit through the Strait of Hormuz.
"The oil market continues to trade like a geopolitical headline machine, with prices swinging sharply based on every comment, rejection, or warning coming from Washington and Tehran," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Trump is scheduled to arrive in Beijing on Wednesday and is expected to discuss Iran, among other topics, with Chinese President Xi Jinping, according to U.S. officials.
"Market attention now shifts squarely to President Trump’s visit to China this week," IG market analyst Tony Sycamore said in a note.
"There is hope he can persuade Beijing to leverage its influence over Iran to push for a comprehensive ceasefire and a resolution to the ongoing disruption in the Strait of Hormuz."
The world has lost about 1 billion barrels of oil over the past two months and energy markets will take time to stabilise even if flows resume, Saudi Aramco CEO Amin Nasser said on Sunday.
Another three tankers carrying crude exited the Strait of Hormuz last week with trackers switched off to avoid Iranian attacks, Kpler shipping data showed, underscoring a rising trend to sustain Middle East oil exports.
"Even if the acute oil shock fades by late 2026, the ongoing risk of renewed disruption in the Strait of Hormuz, depleted inventories and weaker policy coordination is expected to keep a geopolitical risk premium embedded in prices," ANZ analysts wrote in a note on Monday.
The ANZ analysts expected Brent to remain above $90 per barrel through 2026 and around $80 to $85 per barrel into 2027 as demand growth resumes and inventories are gradually rebuilt.
Reflecting the impact of supply disruptions, top oil importer China's inbound shipments fell to the lowest level in almost four years in April, official data released over the weekend showed.