OIL
Olamilekan Abayomi
Oil prices jumped sharply on Monday June 1, 2026, after Iran’s state-affiliated Tasnim news agency announced that Tehran had suspended all negotiations with the U.S. through mediators. The breakdown came after a weekend of strikes between the U.S. and Iran, plus Israeli attacks in Lebanon that violated the ceasefire terms Tehran had set for any peace deal.
Brent crude’s August contract shot up about 7% to top $97 a barrel, while U.S. West Texas Intermediate for July delivery surged around 7-7.7% to $94-$97 a barrel. That marked the biggest one-day gain for both benchmarks since late April/early May. Equities struggled as the oil spike hit markets, with Wall Street opening lower before tech stocks like Nvidia helped the Nasdaq recover later.
The trigger was Iran’s statement via Tasnim that negotiators would stop exchanging messages with Washington until Israel fully withdraws from occupied areas in Lebanon and stops attacks in both Lebanon and Gaza. Tehran also signaled it would move to fully block the Strait of Hormuz in retaliation for the ceasefire violations. The Strait carries about 20% of the world’s oil and LNG, so any threat to it immediately raises supply risk premiums.
The context is a fragile ceasefire that has mostly held since mid-April after U.S. and Israeli strikes on Iran at the end of February. But traffic through Hormuz has remained scant and negotiations have dragged on. Iran insists any deal must also cover Israel’s escalating offensive into Lebanon. Israeli Prime Minister Benjamin Netanyahu ordered strikes on southern Beirut overnight Sunday, which Iran cited as a direct violation.
Analysts said the market had been pricing in a June reopening of Hormuz and renewed Iranian oil supply. Chris Beauchamp of IG noted “hopes of further progress in US-Iran talks have been dashed… this has duly resulted in a spike for oil prices, since the combination of this and the weekend’s exchange of fire dramatically raises the chances of a fresh round of conflict”. He added that stockpiles are being run down and “no such opening is in sight, and each day brings the crunch point closer.
There was some back-and-forth during the day. President Trump posted that Iran “wants to make a deal” and later told ABC News he expects a deal to extend the ceasefire and reopen Hormuz “over the next week”. But by close, Brent still settled 4.2% higher and WTI 5.5% higher, keeping oil at its best day in a month despite Trump saying talks had resumed after the pause.
