Oil prices rise after Iran restricts access to Strait of Hormuz and ceasefire nears expiration

Key Points:

• Oil prices surged about 7% on Sunday after Iran blocked most ship traffic through the Strait of Hormuz, a critical route for one-fifth of global crude oil supply, raising concerns about supply disruptions.
• Iranian gunboats fired on tankers attempting to pass through the strait following Iran's announcement of its closure, prompting the US military to fire warning shots and seize an Iranian-flagged vessel, escalating tensions between the two countries.
• President Trump called the Iranian actions a violation of the ceasefire and indicated that a US delegation is headed to Pakistan for peace talks, with a deadline for agreement set for Wednesday; however, Iranian officials stated they are far from a final deal.
• No tankers successfully crossed the Strait of Hormuz on Sunday, according to tracking data, highlighting the severity of the blockade and potential impacts on global oil supply.
• US gas prices remain high, averaging $4.05 per gallon nationally, with Energy Secretary Chris Wright suggesting prices may not drop below $3 per gallon until next year, while US stock futures declined amid the geopolitical uncertainty.