Brent oil briefly tops $108 per barrel after Iran peace talks unravel

Oil prices were higher on Monday morning as plans for a second round of peace negotiations between the U.S. and Iran unraveled again.

International benchmark Brent oil futures with June delivery rose nearly 3% to close at $108.23 per barrel. U.S. West Texas Intermediate futures with June delivery added about 2% to settle at $96.37.

“Oil is trading stronger this morning after attempts to get US-Iran peace talks back on track broke down, erasing hopes for a resumption of energy flows through the Strait of Hormuz anytime soon,” Warren Patterson, head of commodities strategy at Dutch bank ING, said in a research note.

“The lack of progress means the market is tightening every day, requiring oil prices to reprice at higher levels,” he added.

Goldman Sachs, meanwhile, raised its oil price forecast on Sunday. Exports through the Strait of Hormuz and Gulf production will take longer than expected to normalize, Goldman analysts said in a note.

Goldman now expects Brent prices to average $90 per barrel in the fourth quarter, compared to $80 under the bank’s previous forecast. It expects West Texas Intermediate to average $83 per barrel, compared to $75 prior.

Citi analysts said Brent prices could reach $150 per barrel if oil flows remain disrupted through the end of June.

Though uncertainty looms large, Iran has offered a new proposal to the U.S. for reopening the Strait of Hormuz and ending the war while suggesting that nuclear talks be deferred, Axios reported Monday, citing a U.S. official and two sources with knowledge of the matter.

President Donald Trump on Saturday canceled plans to send U.S. envoy Steve Witkoff and Jared Kushner to Islamabad, Pakistan, for negotiations with Iran.

“Too much time wasted on traveling, too much work! Besides which, there is tremendous infighting and confusion within their ‘leadership,'” Trump wrote in a post on Truth Social.

“Nobody knows who is in charge, including them,” the president said. “Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”

Iranian Foreign Minister Abbas Araghchi traveled to Islamabad over the weekend but met only with Pakistani officials before leaving.

“No meeting is planned to take place between Iran and the U.S.,”  Iran’s Foreign Ministry spokesperson Esmaeil Baqaei said in a social media post late Friday.

— CNBC’s Sarah Whitten, Azhar Sukri and Kevin Breuninger contributed to this report.