#Gate广场四月发帖挑战 Negotiation Breaks Down, Oil Prices Gap Up: Monday Crude Market Analysis Amid US-Iran Standoff

Key Points
The US-Iran Islamabad negotiations failed to reach an agreement, and the geopolitical risk premium quickly returned. It is expected that the international crude oil market will open with a major gap up on Monday, with Brent crude potentially challenging the $110 per barrel level again. Market focus has shifted completely away from supply-and-demand fundamentals to the security of passage through the Strait of Hormuz and the risk of conflict escalation.
Negotiation Failure: The “Switch” of Risk Premiums Has Been Reopened
According to the latest news, the third round of US-Iran talks in Islamabad ended on April 12, without any agreement on ending the war. US Vice President Vance confirmed that despite 21 hours of substantive discussions, the two sides have major differences on core issues, and no breakthrough was achieved.
The failure of the negotiations directly led to the geopolitical risk premium, which had previously faded due to a temporary ceasefire, being quickly repriced back into oil prices.
Earlier, the market had expected the talks to make progress, pushing oil prices to the largest weekly drop in nearly six years this week, and Brent crude briefly fell to around $94.75 per barrel. However, news that the talks had broken down completely reversed this expectation, shifting market sentiment from cautious optimism to tense risk aversion.
Key Dispute: Control of the Strait of Hormuz Is the Core Issue
The main deadlock in these negotiations centers on who controls the Strait of Hormuz.
- US position: Calls for “joint management” of the Strait of Hormuz to ensure freedom of navigation, and insists on Iran giving up nuclear weapons.
- Iran’s bottom line: Rejects joint management, insists on sovereignty over the strait and the right to collect “tolls,” and demands that all overseas assets be unfrozen.
As the “throat” route for global oil transportation, the Strait of Hormuz carries about 20%-30% of the world’s seaborne crude oil trade (about 20 million barrels per day). Its passage conditions directly determine the stability of global crude oil supply. At present, the strait remains under strict flow restrictions, with around 2,000 ships stuck in the Persian Gulf, and on Sunday there was even an extreme case of zero ships passing through. The failure of the negotiations has sharply increased the risk that the strait could be fully sealed again, which is the most direct factor driving up oil prices.
Monday Market Outlook: Gap Up and High Volatility
Based on the established fact of the negotiation failure, the international crude oil market on Monday (April 13) is expected to show the following trends:
- Prices gap up on opening: The market will react directly to the breakdown of the talks. Brent crude and WTI crude are both expected to open with significant price gaps. Brent crude could rebound quickly, retesting the $110 per barrel psychological level, and it may even attempt to move toward above $120 per barrel.
- Volatility surges sharply: Market sentiment will be extremely sensitive. Even small changes regarding military standoffs, the strait’s passage conditions, or official statements from either side could trigger sharp swings in oil prices. Traders will closely track changes in the number of ships actually transiting the Strait of Hormuz.
- Technical breakouts: A rapid surge in oil prices may break through prior technical resistance levels, leading to follow-through from algorithmic trading and stop-loss orders, further amplifying the rally.
Points to Watch Next
The direction of the Monday market will depend heavily on the following key information:
- Developments in the fourth round of talks: Whether both sides announce that they will continue holding a fourth round of negotiations, and the tone and progress of the talks. Any signs of easing could suppress the upward momentum in oil prices.
- Official statements: The subsequent official statements from the US and Iran—whether they demonstrate a hardline stance or leave room for negotiations.
- Military actions: US and Iranian military developments in the Persian Gulf, especially whether direct military clashes will occur.
- Regional situation: Whether Israel’s military operations in Lebanon will expand, which will become another important variable affecting the situation.
In short, the failure of US-Iran negotiations injects strong bullish momentum into the international crude oil market on Monday. Until the issue of the Strait of Hormuz is resolved substantively, oil prices will remain elevated and accompanied by extremely high volatility. Investors should remain alert to extreme market moves driven by geopolitical risk.