Brent crude tops $90 as US-Iran talks stall; US strategic reserves hit 44-year low

Oil prices surged Monday as diplomatic efforts between the United States and Iran hit a deadlock after the 60-day negotiating deadline set under their ceasefire MOU expired.

Brent crude futures for October delivery closed at $90.87 per barrel on the ICE Futures Exchange, up 2.65 percent from the previous session.

West Texas Intermediate futures for September delivery also rose 2.55 percent to $84.50 per barrel on the New York Mercantile Exchange.

The jump in oil prices reflected heightened geopolitical risk as tensions between the two countries flared anew following the expiration of the 60-day deadline written into the ceasefire MOU signed in June.

Iran's Foreign Ministry spokesperson told state media that "we have not started any negotiations at all," adding that "the 60-day deadline is no longer meaningful because the United States violated the agreement from the very beginning."

A senior Iranian official also warned Reuters that if a diplomatic resolution fails, the country would shift from its current defensive military posture to a "full offensive."

Donald Trump, meanwhile, said Iran "must raise the white flag of surrender" and said preventing Iran from acquiring nuclear weapons remains Washington's top priority.

Trump also issued a profanity-laced warning directed at Oman, which has been facilitating talks between the US and Iran, saying he would "bomb them mercilessly" if Oman interfered.

He shrugged off any suggestion of extending the MOU with Iran, saying flatly: "No."

Amid fears of supply disruptions, US Strategic Petroleum Reserve stockpiles fell to their lowest level since December 1982 — a roughly 44-year low.

Data from the US Department of Energy showed that SPR inventories dropped by about 5.3 million barrels last week to 293.4 million barrels, reflecting ongoing releases aimed at managing Middle East risk and stabilizing oil prices.

Market analysts expect near-term energy supply uncertainty and price volatility to persist as ship traffic through the Strait of Hormuz has dropped sharply amid the US-Iran standoff.

Phil Flynn of Price Futures Group said "the rhetoric is getting hotter and so are oil prices," noting that uncertainty surrounding the Strait of Hormuz is deepening market concerns.