Oil Prices Surge Following U.S. Seizure of Iranian Ship and Trump Ultimatum

Global energy markets reacted sharply on Monday as oil prices climbed more than 5.3% to $95.62 per barrel. The volatility follows the U.S. seizure of the Iranian cargo ship Touska in the Strait of Hormuz. U.S. Central Command released footage of the operation, which involved the USS Spruance disabling the vessel's propulsion before Marines boarded via helicopter. The ship was reportedly targeted due to existing U.S. Treasury sanctions, prompting the Iranian Revolutionary Guard to vow retaliatory action against the U.S. military. Diplomatic tensions have escalated ahead of scheduled peace talks in Islamabad. President Trump issued a stern warning via social media, stating that while the U.S. is offering a "fair and reasonable DEAL," a failure to agree would result in the U.S. military "knocking out" Iran's power plants and bridges. Despite the rhetoric, the U.S. is dispatching a negotiating team, supported by Qatari facilitators, to Islamabad on Monday evening. However, Iranian state media has suggested that diplomatic prospects are dimming due to the naval blockade and what they term "excessive U.S. demands." The situation in the Strait of Hormuz remains critical, with commercial shipping flows effectively paralyzed despite conflicting reports regarding the opening of the waterway. Traders are currently bracing for the expiration of a ceasefire, expected either Tuesday or Wednesday, as the naval presence creates the highest traffic levels seen since the onset of recent hostilities. While Qatar continues to act as a back-channel facilitator, the reversal of Iran's brief decision to reopen the Strait has left the path toward a de-escalation uncertain.