Brent crude jumped back up past 100 US dollars a barrel, rising by more than 7% to 102.1 dollars.
Oil prices have surged higher after US President Donald Trump vowed to blockade Iranian ports as ceasefire talks ended without agreement.
Brent crude jumped back past 100 US dollars a barrel, rising by more than 7% to 102 dollars in Monday morning trading and sparking fears of a worsening global energy crisis.
Oil had fallen back below the psychological 100 dollars milestone last week after the US and Iran had agreed a two-week ceasefire deal, which included reopening the crucial Strait of Hormuz shipping route, through which a fifth of the world’s oil is carried.
Mr Trump said he would begin a blockade of all Iranian ports on Monday, though this was tempered from an earlier threat to completely block the strait following the breakdown of peace talks with Tehran, which are being mediated by Pakistan.
Iran has threatened retaliation in response to Mr Trump’s move and both sides have blamed each other for the failure of the ceasefire agreement.
Prime Minister Sir Keir Starmer has said the UK will not join the blockade.
Kathleen Brooks, research director at XTB, said: “Failure to reach a deal means that the Strait of Hormuz is still closed and could become even more dangerous if Iran follows through with its threats.”
She added: “The question now is whether the oil price will return to its pre-ceasefire highs around 112 dollars a barrel for Brent crude.
“Before this weekend’s developments, stocks had retraced most of their losses since the start of March, the S&P 500 is a mere 130 points away from its pre-war high.
“However, the path of least resistance for global stocks at the start of this week is for further losses, and we expect volatility to rise.”
