Global oil prices rose in Monday morning trade in Asia after President Donald Trump said the US has intercepted and seized an Iran-flagged cargo ship.
It came after Iran said on Saturday that it was closing the Strait of Hormuz waterway again to commercial vessels and that any ship that approaches it would be targeted.
Brent crude futures were up by 4.74% at $94.66 (£70.11) a barrel, while West Texas Intermediate was 5.6% higher at $88.55.
Energy markets have seen wild swings since the US and Israel attacked Iran on 28 February and Tehran responded with threats to target shipping in the strait, through which about 20% of the world’s oil and liquefied natural gas (LNG) passes.
Earlier, Trump said his representatives would be in Pakistan on Monday for negotiations. A White House official said Vice-President JD Vance would lead the US delegation.
But Iran’s state media said Tehran had “no plans for now to participate” in the talks, although Iranian officials have not clarified the country’s position yet.
“Oil markets continue to gyrate in response to oscillating social media posts by the US and Iran, rather than the realities on the ground which remain challenging for oil flows to resume in a rapid fashion”, analyst Saul Kavonic from financial services firm MST Marquee told the BBC.
“This is all part of negotiations, physically playing out in real time on the Strait of Hormuz.”
Trump had on Friday said that the naval blockade would continue until a deal was agreed by the two countries.
