Oil prices surged by approximately 5% during Monday's trading amid fears of a collapse in the U.S.-Iran ceasefire after Washington seized an Iranian cargo ship, while navigation through the Strait of Hormuz remained nearly halted.

Brent crude contracts rose by $4.37, or 4.8%, to reach $94.75 per barrel by 11:48 GMT, while U.S. West Texas Intermediate (WTI) climbed by $4.76, or 5.7%, to $88.61 per barrel.

Both contracts had declined by 9% on Friday—their largest daily drop since April 18—after Iran announced that passage for all commercial vessels through the Strait of Hormuz was open for the remainder of the ceasefire.

At the same time, U.S. President Donald Trump stated that Iran had agreed not to close the Strait again, a waterway through which approximately one-fifth of global oil supplies flowed before the war broke out nearly two months ago.

Jun Guo, an analyst at Sparta Commodities, said: "Within just 24 hours of the 'full opening' announcement on Friday, there were already tankers coming under fire from the Iranian Revolutionary Guard."

She added: "Market fundamentals are deteriorating, as between 10 to 11 million barrels per day of crude oil remain out of supply," referring to production losses.

The United States stated on Sunday that it had seized an Iranian cargo ship that attempted to break the blockade, while Iran announced it would retaliate, increasing fears of a resumption of hostilities.

Tehran also announced it would not participate in a second round of negotiations that the United States had hoped to launch before the expiration of the two-week ceasefire this week.

Bjarne Schieldrop, an analyst at SEB Research, said: "Financial markets are trading on the basis of negotiation, improvement, and resolution, while at the same time the physical market is deteriorating day by day."

He added: "Physical oil flows remain restricted due to supply disruption, longer voyage times, and high shipping and insurance costs."

Shipping data showed that maritime traffic through the Strait of Hormuz remained nearly at a standstill on Monday, with only three transits recorded during the past 12 hours.

More than 20 vessels had crossed the Strait on Saturday, carrying oil, liquefied petroleum gas (LPG), metals, and fertilizers, according to Kpler data—the highest number of vessels to cross the passage since March 1.

In another context, China is reducing refined fuel exports rather than banning them, as countries like Malaysia and Australia continue to receive supplies, even after Beijing extended the restrictions imposed last month into April, according to shipping data and traders.

The U.S. dollar climbed to one-week highs against major currencies on Monday before paring some gains, as renewed U.S.-Iran tensions and fading hopes for a Middle East peace deal drove investors toward safe-haven assets.

The United States stated on Sunday that it had seized an Iranian cargo ship that attempted to break the blockade, while Iran announced it would retaliate, sparking fears of a resumption of hostilities.

Tehran also announced it would not participate in a second round of negotiations that the U.S. had hoped to launch before the expiration of the two-week ceasefire with Iran on Tuesday.

Charu Chanana, head of investment strategy at Saxo, said:

"The weekend escalation revives the geopolitical risk premium just as markets were starting to price in peace gains," adding that the rise in oil prices "is not just an energy story, it is also a growth and interest rate story."

In latest trading, the euro fell 0.05% to $1.1754, after hitting a one-week low of $1.1729 earlier in the session, while the British pound declined 0.15% to $1.3497. The risk-sensitive Australian dollar also dropped 0.3% to $0.7145.

The dollar index, which measures the U.S. currency against a basket of six peers, rose to a one-week high of 98.47 before retreating to 98.34.

The index remains down 1.55% during April, after having jumped 2.3% in March driven by safe-haven demand following the outbreak of the war.

Analysts noted that the relatively limited movements in the currency market, with the dollar retreating from some of its early gains, suggest some remaining optimism that a solution is still possible despite the weekend setbacks.

Chris Weston, head of research at Pepperstone, said:

"While the market tone leans toward risk aversion at the start of the week, the moves so far appear orderly and not indicative of a major volatility shock."

He added: "Market participants realize the path toward a formal agreement will not be linear and will remain subject to sudden changes, so a shift in sentiment would not be entirely surprising."

Markets focus on the Strait of Hormuz

The war has entered its eighth week and has caused the most severe energy supply shock in history, leading to rising oil prices as a result of the effective closure of the Strait of Hormuz, through which about one-fifth of global oil supplies typically pass.

The United States continues to impose a blockade on Iranian ports, while Iran has lifted and then reimposed its blockade on maritime traffic through this vital waterway.

This led to a rebound in oil prices on Monday, with Brent crude contracts jumping by more than 6% to $95.92 per barrel, while U.S. West Texas Intermediate (WTI) rose to $89.29 per barrel, a 6.5% increase.

Nick Twidale, chief market strategist at ATFX Global in Sydney, said:

"The Strait of Hormuz remains the fundamental factor for many, and hopes for the U.S. and Iran sitting at the negotiating table before the ceasefire expires now seem remote."

He added: "For now, I believe we will see further declines in risk assets in the coming sessions."

Japanese yen under pressure

The Japanese yen declined to 158.96 per dollar, although it remains below the critical 160 level that traders fear could prompt authorities to intervene to support the currency.

Silver prices lost more than 2.5% in the European market on Monday, moving away from five-week highs due to active correction and profit-taking, alongside pressure from a rising U.S. dollar fueled by renewed geopolitical tensions in the Middle East.

The U.S. Navy's seizure of an Iranian cargo ship has escalated tensions between the United States and Iran over control of the Strait of Hormuz, while Tehran continues to refuse participation in a new round of negotiations scheduled for later today in Pakistan.

Price Overview

- Silver Prices Today: Silver metal prices fell by 2.65% to ($78.65), from an opening level of ($80.78), which also marked the daily high.

- Upon price settlement on Friday, silver prices achieved a 0.3% increase, marking the first gain in three days and hitting a five-week high of $83.06 per ounce following Iran's announcement to open the Strait of Hormuz.

- Last week, silver surged by 6.4%, marking its fourth consecutive weekly gain, supported by the Iranian war truce and improved market sentiment.

The U.S. Dollar

The dollar index rose 0.15% on Monday, extending its gains for a third consecutive session and reaching its highest level in nearly a week. This reflects the continued ascent of the American currency against a basket of global currencies.

The rise is driven by renewed safe-haven buying of the U.S. dollar amid escalating U.S.-Iran tensions and diminishing prospects for a Middle East peace agreement.

Charu Chanana, head of investment strategy at Saxo, noted that the weekend escalation has revived the geopolitical risk premium just as markets had begun to price in potential peace gains.

Iranian War Updates

- The Iranian Navy announced the re-closing of the Strait of Hormuz as of Saturday afternoon until the U.S. blockade on Iranian vessels is lifted.

- U.S. President Donald Trump stated that the U.S. Navy intercepted the Iranian-flagged cargo ship "Tosca" in the Gulf of Oman.

- Tehran labeled the attack on the ship an "act of maritime piracy" and a flagrant violation of the ceasefire agreement, vowing to retaliate.

- While Islamabad prepares to host a second round of peace negotiations today, Iran has so far refused to participate.

- International and regional parties are pressuring Tehran to join the talks before the two-week ceasefire expires tomorrow, Tuesday.

Global Oil Prices

Global oil prices surged by more than 5% on Monday, staging a strong recovery from four-week lows as fears of supply disruptions from the Arabian Gulf resurfaced following the re-closing of the Strait of Hormuz.

Rising oil prices are renewing concerns over accelerating inflation, which could prompt global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of rate cuts or prolonged pauses.

U.S. Interest Rates

- According to the CME Group's FedWatch tool: the probability of keeping U.S. interest rates unchanged at the April meeting is currently priced at 99%, while the probability of a 25-basis-point hike stands at 1%.

- Investors are closely monitoring upcoming U.S. economic data to re-evaluate these expectations.

Gold prices lost nearly 2% in the European market on Monday at the start of the week's trading, retreating from a four-week high due to active correction and profit-taking, combined with pressure from the rising U.S. dollar in the foreign exchange market.

The U.S. Navy's seizure of an Iranian cargo ship led to escalating tensions between the United States and Iran over control of the Strait of Hormuz, with Tehran continuing to refuse participation in a new round of negotiations scheduled to be held in Pakistan later today.

Price Overview

- Gold Prices Today: Gold metal prices fell by approximately 2.0% to ($4,737.15), from the opening level of ($4,829.31), and recorded a high of ($4,829.31).

- Upon price settlement on Friday, gold prices achieved an increase of 0.85%, marking the first gain in three days and hitting a four-week high of $4,890.78 per ounce after Iran's announcement to open the Strait of Hormuz to global navigation.

- Last week, the precious metal "gold" achieved an increase of 1.7%, marking its fourth consecutive weekly gain, thanks to the Iranian war truce and improved market sentiment.

The U.S. Dollar

The dollar index rose on Monday by 0.15%, extending its gains for the third consecutive session and reaching its highest level in nearly a week, reflecting the continued ascent of the American currency against a basket of global currencies.

This rise comes amid renewed buying of the U.S. dollar as a safe haven, given the escalating tensions between the United States and Iran and the weakening chances of reaching a peace agreement in the Middle East.

Charu Chanana, head of investment strategy at Saxo, stated: The weekend escalation has revived the geopolitical risk premium just as markets began to price in peace gains.

Iranian War Updates

- The Iranian Navy announced the re-closing of the Strait of Hormuz as of Saturday afternoon until the U.S. blockade on Iranian ships is lifted.

- U.S. President Donald Trump stated that the U.S. Navy intercepted the Iranian-flagged cargo ship "Tosca" in the Gulf of Oman.

- Tehran considered the attack on the ship an "act of maritime piracy" and a flagrant violation of the ceasefire agreement, vowing to respond to this escalation.

- While the Pakistani capital, Islamabad, prepares to host a second round of peace negotiations later today, Iran refuses to participate in this round so far.

- Several international and regional parties are pressuring Tehran to participate in the peace negotiations before the two-week ceasefire agreement expires tomorrow, Tuesday.

Global Oil Prices

Global oil prices rose on Monday by more than 5% as part of a strong recovery from a four-week low, amid renewed fears of supply disruptions from the Arabian Gulf region, especially after the re-closing of the Strait of Hormuz to oil tankers.

Undoubtedly, the rise in global oil prices renews fears of accelerating inflation, which may prompt global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of cutting or holding rates steady for a long period.

U.S. Interest Rates

- According to the FedWatch tool of the CME Group: the pricing of the probabilities of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, and the pricing of the probabilities of raising interest rates by about 25 basis points is at 1%.

- In order to re-price those probabilities, investors are closely following the release of more economic data from the United States.

Gold Performance Expectations

Market strategist Ilya Spivak said: Gold prices fell today after the U.S.-Iran ceasefire, which markets celebrated last week, appeared to be collapsing.

Christopher Wong, a strategist at OCBC Bank, stated: In the meantime, we still expect the gold trading trend to be influenced by general risk sentiment, and this depends heavily on the results of the ceasefire talks.

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased on Friday by about 7.71 metric tons, marking the fourth consecutive daily increase and bringing the total to 1,060.62 metric tons, which is the highest level since March 19.