Oil Prices Stay Above $104 as Trump Rejects Iran Deal, Blocking Key Shipping Routes

Oil prices remain elevated above $104 per barrel as negotiations between the United States and Iran have stalled, creating uncertainty in global energy markets. The breakdown in talks signals that the ongoing conflict between the U.S., Israel, and Iran will likely persist, keeping critical shipping routes disrupted and energy supplies constrained. This impasse comes after weeks of conflict that began in late February 2026, stemming from political unrest that rapidly escalated into military confrontation.

The stalled negotiations have had immediate ripple effects across global markets. Gulf stock markets declined at the start of Monday trading as investors reacted to signs that U.S.-Iranian talks were not progressing. The Strait of Hormuz, one of the world's most critical shipping lanes for oil and liquefied natural gas, remains effectively closed due to the conflict and military tensions. According to reporting on the situation, President Trump rejected Iran's response to a U.S. peace proposal over the weekend, effectively derailing diplomatic efforts and raising concerns about how long the disruption might continue.

Energy markets in Europe have been particularly hard hit by the stalled negotiations. Dutch and British gas contracts firmed up Monday despite the failed peace attempt, with benchmark natural gas prices reflecting trader anxiety about prolonged supply disruptions. According to European Commission officials, the continent has already paid approximately $32 billion in additional costs for oil and gas imports since the conflict began. Gas storage facilities across Europe remain critically low at just 28 percent capacity compared to 58 percent two years ago, leaving little buffer against extended supply interruptions. Germany's storage stands at only 22 percent, while the Netherlands has just 5 percent capacity remaining.

The inability to resolve the conflict through diplomacy suggests that energy markets will likely remain volatile in the coming weeks. Analysts have noted that market uncertainty persists because the current situation provides no clear indication of when shipping through the Strait of Hormuz might resume or when a lasting ceasefire might be achieved. While some recent reports indicated that President Trump announced a five-day delay to threatened military strikes and cited "productive discussions," the latest round of failed negotiations suggests these diplomatic channels remain tenuous at best.