By Ronnie Harui


Oil prices climbed in early Asian trade on Monday as a potential setback to U.S.-Iran peace talks revived concerns over supply disruptions in the Middle East.

President Trump said in a social media post on Sunday that Iran's reply to the U.S. proposal to end the conflict was unacceptable. "I have just read the response from Iran's so-called 'Representatives.' I don't like it - Totally unacceptable!" Iran had sent its response to the latest U.S. proposal to mediator Pakistan, which didn't include commitments about Tehran's nuclear program.

Trump's remarks could revive tensions in the Strait of Hormuz, a critical waterway for global oil transport, where roughly one-fifth of the world's oil supply typically passes. Recently, Iran launched a barrage of missiles and drones at commercial vessels, U.S. Navy assets, and the United Arab Emirates, where an oil transit hub was set ablaze. Meanwhile, U.S. helicopters sank Iranian speedboats, and Iranian drones struck a civilian vessel.

"The fragile truce between the U.S. and Iran faced setbacks," Commerzbank Research analysts said in a research report. Trump "was blunt in his assessment of the diplomatic feedback," the analysts said, noting Trump's remarks on social media. "This development has reversed some of the optimism seen during the previous week," the analysts added.

Front-month West Texas Intermediate crude oil futures rose 3.9% to $99.13 per barrel, and front-month Brent crude oil futures gained 3.6% to $104.91 a barrel, ICE data showed.

Meanwhile, equity markets across most of Asia gained following a better-than-expected U.S. jobs report and a chip-stock rally that powered the S&P 500 to a record high last Friday. Japan's Nikkei Stock Average added 0.8%, and South Korea's Kospi climbed 5.0%, while Australia's S&P/ASX 200 benchmark index declined 1.0%.

The U.S. jobs report released Friday showed the U.S. labor market surpassed expectations in April, adding 115,000 jobs. The unemployment rate held steady at 4.3%.


Write to Ronnie Harui at ronnie.harui@wsj.com


(END) Dow Jones Newswires

05-10-26 2124ET