Brent crude futures jumped nearly 3% to settle at $104.21 per barrel on Monday after President Donald Trump rejected Iran's latest counterproposal as "garbage" and described the ceasefire framework as "unbelievably weak," extending the effective closure of the Strait of Hormuz and forcing a rapid re-pricing of geopolitical risk.
Price Action
July-delivery Brent settled at $104.21 per barrel, a gain of approximately 2.9% on the session and the highest close since the late-April spike to $118. WTI June futures rose by a similar margin to $98.07. The intraday high in Brent reached $105.40 in early New York trade, before easing as profit-takers stepped in ahead of options expiry later this week.
The move unwound roughly half of the relief rally that followed the April 8 Pakistan-mediated ceasefire and effectively returned the front of the curve to the $100–$110 regime that prevailed through most of the past month. Implied volatility on at-the-money June calls jumped four points to 71%, the largest single-session expansion in three weeks.
What Trump Said
Speaking to reporters at the White House on Monday afternoon, the president called the state of the ceasefire "unbelievably weak" and described Tehran's counterproposal — delivered through Pakistani intermediaries late last week — as "garbage." He stopped short of formally withdrawing the U.S. memorandum of understanding sent to Iran on May 7 but said Washington was "not going to keep negotiating with people who aren't serious."
Asked whether the naval blockade and the Strait of Hormuz interdiction posture would be maintained, the president responded affirmatively, adding that "the pressure stays until they come back to the table with something real." Treasury officials confirmed separately that no additional sanctions waivers are under active consideration.
Tehran's Position
Iran has not formally responded to the president's remarks, but a statement from Foreign Minister Hossein Amir-Abdollahian carried by state media on Monday evening described the U.S. position as "maximalist and detached from regional realities." The foreign ministry reiterated that the Strait of Hormuz "cannot return to its prior status" until reparations and a binding non-targeting commitment are agreed.
Iranian Expediency Council member Mohsen Rezaei, who last week demanded U.S. reparations as a precondition for talks, told a domestic audience on Monday that Tehran "will not be lectured by a government that began this war." The rhetoric narrows the diplomatic runway materially compared with the cautious optimism that prevailed only seventy-two hours earlier.
Strait of Hormuz Remains Effectively Closed
Vessel-tracking data continue to show only a handful of tankers transiting the Strait each day, well below the 25–30 typical of pre-conflict operations. The vessels that do cross are doing so under multinational escort and after extended clearance with Iranian Maritime Authority personnel. Insurers report war-risk premiums holding near 1% of hull value, with several major underwriters reluctant to extend cover at all for non-escorted transits.
The IEA estimates that roughly 14 million barrels per day of crude and condensate, plus an equivalent volume of LNG, normally pass through the chokepoint. Saudi Aramco CEO Amin Nasser told an industry conference Monday that the market is losing approximately 100 million barrels of supply each week relative to a normalized baseline, and that prolonged disruption could push any return to balance into 2027.
Supply Response
U.S. crude exports continue to run at record levels above 5.5 million barrels per day, supported by aggressive Strategic Petroleum Reserve releases and expanded Permian throughput. The export surge is offsetting a meaningful share of the lost Gulf supply but has tightened the U.S. domestic balance and pushed retail gasoline above $4.40 per gallon on a national average basis.
OPEC+ producers outside the Gulf — principally Russia, Kazakhstan, and Nigeria — have nudged output modestly higher, but the bloc's overall production fell again in April to its lowest level since 2000, according to a Reuters survey published Monday. Saudi Arabia has so far declined to deploy spare capacity to defend price levels, a posture confirmed at the May 3 OPEC+ ministerial meeting.
Demand-Side Picture
Asian refining margins are recovering modestly as crack spreads adjust to the higher crude regime, but throughput remains below pre-conflict norms. Indian state refiners have indicated they will continue to favor stock draws over spot purchases at levels above $100. Chinese teapot refiners reduced runs by an additional 4% week-on-week, citing margin compression and uncertainty over future feedstock availability.
European product demand has held up better, supported by seasonal driving uptake and continued gas-to-oil substitution in industrial users. Diesel cracks in Northwest Europe widened a further $1.20 per barrel on Monday, suggesting that distillate tightness remains the more acute structural problem within the broader complex.
Where Sell-Side Sees Risk
Goldman Sachs reiterated a $100–$115 Brent range with a clear upside skew, flagging $125 as the relevant target in any further escalation scenario. JPMorgan moved its central case modestly higher to $98–$112. RBC Capital Markets warned that a formal collapse of the ceasefire framework — as distinct from rhetorical strain — could put $130 in play within a single trading week, and noted that the options market is already pricing significant probability of a return to the April highs.
Citi cautioned in a Monday-evening note that the market may be under-pricing a tail scenario in which the U.S. moves from blockade to direct interdiction of Iranian oil infrastructure. Such a step, the bank argued, would carry implications well beyond what current option skews imply.
Catalysts to Watch This Week
Three signals will determine whether $104 holds, breaks higher, or fades. First, any formal Iranian response to the president's remarks — particularly from Supreme Leader-level voices rather than parliamentary or council figures. Second, the EIA weekly inventory report on Wednesday, which will show how aggressively the SPR has been drawn down to support exports. Third, any incident in or around the Strait of Hormuz: even a single tanker event, in the current environment, would reprice the curve materially.
For now the market is back where it has spent most of the past two months — pricing diplomacy as a hope, not a base case. The ceasefire is on life support; so is the $90s.