Brent crude rises above $110 after report says Washington views Iran’s latest proposal as insufficient

Oil prices climbed on Monday after a report stated that the United States considers Iran’s latest proposal to end the war insufficient.

Global benchmark Brent crude futures for July delivery rose more than 2% to settle at $112.10 per barrel. US West Texas Intermediate crude futures for June delivery also gained nearly 3% to close at $108.66 per barrel.

An Iranian Foreign Ministry spokesperson said negotiations are still ongoing through Pakistan, adding that both Washington and Tehran have submitted their latest comments on the Iranian proposal.

Axios quoted a senior US official as saying the proposal does not represent a “meaningful improvement” and remains insufficient to secure an agreement. The report also said that President Donald Trump is expected to meet with his national security team on Tuesday to discuss military options.

Meanwhile, Iran’s Tasnim news agency reported that the United States had offered temporary relief on oil sanctions, a key Iranian demand. However, a US official told CNBC that the Iranian claims were inaccurate.

Over the weekend, Trump warned that Iran “better move” toward reaching a deal, saying delays in reopening the Strait of Hormuz could lead to renewed military conflict. The president’s comments came as analysts pointed to record declines in global oil inventories.

“Iran’s clock is ticking, and they better move fast or there will be nothing left,” Trump wrote Sunday on Truth Social, adding that “time is running out.”

Despite a fragile ceasefire reached in April, tensions remain high between Iran and the United States, with Tehran continuing to keep the Strait of Hormuz largely closed while the Trump administration maintains a blockade on Iranian ports.

Before the war began, nearly one-fifth of global oil and gas supplies passed through the strait.

In its latest monthly report, the International Energy Agency warned that global oil inventories are falling at a record pace as the Strait of Hormuz remains closed, saying that “the rapid decline in reserves, combined with ongoing disruptions, could signal further price spikes ahead.”

According to a report issued last week by UBS, inventories could approach historic lows of 7.6 billion barrels by the end of May if oil demand remains at current levels.

Europe faces growing oil shortage risks

Jeff Currie, co-chairman of commodities exchange Abaxx, told CNBC’s Squawk Box Europe that concerns over oil supplies are likely to intensify as inventories continue to decline.

“Anyone actually operating in this industry will tell you the situation is bad. The Iranians want to inflict damage. The issue here is not the price of oil, but its availability,” Currie said.

“There’s no actual shortage yet, but Europe could face one by the end of the month. The market isn’t overly worried right now, but with the UK’s late-May holiday and the US summer driving season approaching, we’ll begin to feel the strain,” he added.