Oil Prices Rise; US-Iran Talks Stall, Hezbollah Rejects Israel-Lebanon Deal

Oil prices surged on Monday as hopes for a U.S.-Iran peace deal faded, with President Trump canceling planned talks in Pakistan and Hezbollah rejecting U.S.-mediated negotiations between Israel and Lebanon. Brent crude rose about 3% to $108.36 per barrel, its highest in three weeks, while U.S. West Texas Intermediate increased 2.6% to $96.85.

The gains followed a 17% weekly rise for Brent and 13% for WTI, the largest since the war began, according to Reuters.

Iran offered to reopen the Strait of Hormuz to commercial shipping if the U.S. ends its blockade of Iranian ports and vessels, according to Axios and The Associated Press. The proposal, relayed through Pakistani intermediaries, includes no concessions on Iran's nuclear program, which President Trump has demanded must end for any agreement.

Two regional officials, speaking anonymously, confirmed the offer to the AP. President Trump dismissed it, stating on Fox News that the U.S. holds "all the cards" and Iranian leaders could contact him directly if they wish to negotiate. A contradictory report from The Hill on Friday indicated the White House planned to send special envoy Steve Witkoff and Jared Kushner to Pakistan on Saturday, as confirmed by White House press secretary Karoline Leavitt.

However, President Trump announced over the weekend that he was not sending the envoys, citing wasted time and confusion in Iran's leadership. >"We have all the cards. " — President Trump, Sunday (Fox News Channel) Iran's Foreign Minister Abbas Araghchi, meeting with Russian President Vladimir Putin in St.

Petersburg on Monday, blamed the U.S. for the failure of prior talks in Pakistan, citing "excessive demands," according to Iranian state media. Araghchi's regional tour included stops in Pakistan and Oman.

Secretary-General

Sheikh Naim Qassem categorically rejected the U.S.-brokered negotiations between Israel and Lebanon, stating they "do not exist for us" and warning that the outcomes would not benefit Lebanon. The statement complicates the tenuous ceasefire in the Israel-Lebanon conflict, which President Trump extended by three weeks last week.

Hezbollah, an Iranian-backed group, has been excluded from the talks, and its forces have engaged in crossfire with Israel. Lebanese President Joseph Aoun said he would not accept a "humiliating agreement" with Israel and accused those who drew Lebanon into war of "treason," in an implicit rebuke to Hezbollah.

Both sides accused each other of violating the ceasefire, with at least 14 killed in Israeli airstrikes on Sunday, the deadliest day since the April 17 truce, per Le Monde. and Israel launched operations against Iran on February 28, at least 3,375 people have been killed in Iran and 2,509 in Lebanon, according to local health authorities.

Israel reports 23 deaths domestically, with additional fatalities in allied Gulf states from Iranian strikes. Fifteen Israeli soldiers, 13 U.S. service members, and six U.N. peacekeepers have also died. The parallel Israel-Hezbollah conflict escalated two days after the Iran war began, following rocket attacks by the group.

The Strait of Hormuz remains constrained, disrupting about a fifth of global crude oil and LNG supplies. Analysts at BNP Paribas noted the closure could broadly affect supply chains for products from plastics to medicine if prolonged. In Israel, Prime Minister Benjamin Netanyahu faces domestic pressure as elections loom, with rivals Naftali Bennett and Yair Lapid announcing a merger of their parties to challenge his coalition.

The stalled diplomacy has fueled inflation concerns, with U.K. officials set to discuss living cost impacts in an emergency meeting on Tuesday.