Iran’s decision to suspend ceasefire negotiations with Washington sent crude oil prices surging nearly seven percent Monday, erasing the assumptions global markets had quietly built into their calculations — that the Strait of Hormuz, shuttered since late February, would be open again by June. It will not be.
Tehran’s move, confirmed by the state-aligned Tasnim news agency, came after a weekend of mutual strikes between the United States and Iran and a breakdown in ceasefire conditions along Israel’s offensive front in Lebanon.
Iran had conditioned any agreement on a halt to the Lebanese campaign; with that campaign intensifying and Lebanon ceasefire lines dissolving, Tehran called off the talks entirely.
The effect on crude markets was immediate and severe. Brent North Sea crude climbed 6.6 percent to $97.15 a barrel. West Texas Intermediate rose 7.6 percent to $94.01. Together they represented the clearest signal yet that the diplomatic scaffolding holding global energy assumptions in place has begun to crack.
The Strait of Hormuz — through which roughly a fifth of the world’s oil and liquefied natural gas flows in normal conditions — has been effectively closed since the United States and Israel launched strikes on Iran in late February. A ceasefire has nominally held since mid-April, but transit through the strait has remained near zero throughout that period. Markets had absorbed that reality with a kind of optimistic patience, pricing in a gradual reopening as diplomacy progressed. Monday’s news removed that premise.
“Markets know that oil stockpiles are being rapidly run down, and the rosy assumptions around the renewal of supplies involved the straits being open by June,” said Chris Beauchamp, chief market analyst at IG.
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That opening is not coming. In Beauchamp’s assessment, each day now brings the supply crunch point closer.
Wall Street, which had been positioned for a positive open Monday morning, absorbed the oil spike and pivoted. The Dow Jones Industrial Average fell 0.2 percent, settling at 50,921.47 points. The S&P 500 and the Nasdaq Composite — the indices most sensitive to technology performance — managed to claw into slight positive territory by early afternoon, but the path there was disorderly.
The rescue came from an unexpected quarter. Nvidia, the California chipmaker whose graphics processing units have become the essential hardware of the artificial intelligence era, announced Monday from Taiwan a new product line that recalibrated investor expectations. The RTX Spark series — central processing units, not graphics chips — will power a new generation of personal computers designed from the ground up to run AI agents capable of executing tasks on behalf of users. Nvidia shares gained more than four percent on the news, providing enough lift to pull both the S&P 500 and the Nasdaq out of the red.
The implications spread quickly through Asian trading sessions. Seoul’s KOSPI index surged more than four percent as the Nvidia announcement reverberated through regional semiconductor markets. Samsung Electronics, whose memory chips are critical components in AI infrastructure, rose more than nine percent. Rival SK Hynix gained over two percent. Tokyo’s Nikkei 225 rose one percent; Hong Kong’s Hang Seng gained 1.1 percent; Shanghai added 0.4 percent.
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European markets, more exposed to the energy shock than the AI uplift, closed uniformly lower. London’s FTSE 100 fell 0.7 percent. The Paris CAC 40 shed 0.5 percent. Frankfurt’s DAX lost 0.4 percent.
The dollar strengthened against its major peers. The euro fell to $1.1626 from $1.1663 at Friday’s close. The pound dipped to $1.3454. The dollar rose against the yen to 159.64.
One notable outlier in European trading was EasyJet, whose shares jumped more than nine percent after the budget carrier publicly dismissed a potential takeover approach from Castlelake, a US private equity firm. Castlelake, which disclosed Friday that it was evaluating a bid for the airline, already holds a 2.14 percent stake. EasyJet’s management called the interest “opportunistic” — language that simultaneously signals resistance and telegraphs that any serious acquirer would need to improve considerably on whatever opening terms Castlelake has in mind.
The day’s larger story, though, belonged to the strait still sitting closed while stockpiles drain and diplomatic channels go dark. Beauchamp framed the collision of the suspended talks and the weekend’s military exchanges as having “dramatically raised the chances of a fresh round of conflict.” Whether markets can sustain another week of that uncertainty — let alone a month — will depend on what moves next in Tehran, Washington, and the corridors between them that have, for now, fallen silent.