Key facts
- Oil prices surged following reports of a halt in U.S.-Iran talks and threats to close the Strait of Hormuz.
- U.S. crude oil futures closed up 5.5% at $92.16 per barrel.
- International Brent crude futures rose 4.5% to $94.98 per barrel.
- Heating oil prices increased 4% and wholesale gas prices rose 2%.
- President Donald Trump made contradictory statements regarding the talks and oil prices.
Oil prices surged sharply following reports from Iranian government-aligned media indicating a halt in talks with the United States aimed at ending the ongoing conflict. Tehran also stated its determination to consider the complete closure of the Strait of Hormuz and the activation of other fronts, including the Bab el Mandeb Strait, a critical commercial waterway.
U.S. crude oil futures closed up 5.5% at $92.16 per barrel, while international Brent crude futures rose 4.5% to $94.98 per barrel. Heating oil, a proxy for jet fuel, saw a 4% increase, and wholesale gas prices climbed 2%. These gains effectively returned oil prices to mid-May levels, before a period of decline that occurred as U.S. administration officials suggested a deal with Iran was within reach.
Conflicting comments from President Donald Trump later in the day did little to immediately quell market unease. Trump told NBC News that the U.S. would maintain its blockade on Iranian ports and expressed no concern about rising oil prices, predicting they would fall soon. He later posted on social media that talks were continuing rapidly with Iran, though NBC News had not independently confirmed either the Iranian report or Trump's claim.
Government bond yields, which influence consumer borrowing rates, also saw a slight increase. The 10- and 30-year Treasury yields initially rose but later fell back to near earlier levels, while shorter-term yields held most of their gains. U.S. stocks initially declined following the news but reversed course in the afternoon, partly buoyed by AI stock momentum. However, the Russell 2000 index, tracking smaller companies, struggled to turn positive. Internationally, European stock markets experienced more widespread selling, with major indexes in Germany, France, the U.K., and Italy closing lower.