West Texas Intermediate crude surged to $115 per barrel on Monday, marking the highest settlement since mid-June 2022, as diplomatic efforts to revive the Iran nuclear deal have stalled. The move reflects renewed concerns over potential supply disruptions in the Middle East, where geopolitical tensions have escalated. Market participants are reassessing risk premiums after months of relative stability in crude markets.
Stalled Iran nuclear negotiations have removed a key downside scenario from traders’ calculations. A revived deal would have allowed Iranian crude back to global markets, adding meaningful supply relief to a market already watching OPEC+ production decisions. Without progress on talks, the possibility of Iranian sanctions remaining in place keeps a risk premium embedded in current prices.
The jump to $115 reflects broader concerns about supply adequacy heading into the Northern Hemisphere’s heating season. OPEC+ production cuts announced earlier this year continue to tighten the global balance, while refinery maintenance in the Atlantic basin is reducing processing capacity. Regional tensions around shipping lanes, particularly the Strait of Hormuz, add another layer of supply risk that buyers are now pricing in more aggressively.
Current price levels remain below the peaks seen during the 2022 energy crisis, when Brent crude briefly approached $140. Market fundamentals today differ significantly from that period, with global growth concerns and demand questions providing some counterweight to supply fears. Whether crude sustains above $115 or moves higher will likely depend on further geopolitical developments and the pace of any future Iran deal negotiations.