Mumbai: Brent crude prices jumped sharply on Monday, rising 3.6% to cross $108 a barrel as uncertainty over the US-Iran conflict and the future of the Strait of Hormuz kept concerns over global oil supplies firmly in focus.

The latest rally came after US President Donald Trump rejected Iran’s proposal linked to reopening the strategic waterway and resuming nuclear negotiations. The development revived fears that the disruption to oil flows through the Strait of Hormuz could persist, adding pressure to an already volatile global energy market.

The rise in crude prices also came as Iranian officials signalled that Tehran remains prepared for a renewed military confrontation while keeping the possibility of diplomacy open.

Brent crude rises as Hormuz uncertainty returns

Brent, the international benchmark for crude oil, rose 3.6% to $108.10 per barrel on Monday, according to market data cited in the latest report.

Ponmudi R, CEO of Enrich Money, said the latest increase followed the rejection of an Iranian proposal aimed at resolving the conflict and reopening the Strait of Hormuz.

“The latest rise in international crude prices follows the rejection of an Iranian proposal to resolve the conflict and reopen the Strait of Hormuz, keeping supply concerns in focus,” Ponmudi said.

The Strait of Hormuz is one of the world’s most important energy transit routes. Any prolonged disruption has the potential to affect crude and petroleum product supplies reaching international markets, particularly from major Gulf producers.

The International Energy Agency has described the current Middle East crisis as the largest supply disruption in the history of the global oil market. The agency has said oil flows through the Strait fell dramatically after the conflict began, forcing producers and traders to seek alternative routes and supplies.

Iran warns it is prepared for renewed war

Iranian Foreign Minister Abbas Araghchi said Tehran was prepared for the possibility of the conflict resuming, while stressing that the diplomatic channel remained open.

Speaking to NBC News’ “Meet the Press”, Araghchi said Iran was ready to stand firm against any new aggression, even if the confrontation developed into what he described as a “doomsday war”. At the same time, he said Iran remained willing to pursue diplomacy.

Araghchi’s remarks followed Trump’s public rejection of Tehran’s latest proposal concerning the Strait of Hormuz.

According to Araghchi, Iran’s proposal would allow the waterway to reopen after certain US actions were taken, followed by negotiations on a broader agreement. He also said Tehran was still awaiting what it regarded as a formal US response through mediators.

Trump, meanwhile, has said he expects further talks with Iran this week, although he has made clear that the terms sought by Washington differ from Tehran’s proposal.

The conflicting messages have left markets uncertain about whether a diplomatic breakthrough can be achieved or whether military tensions will intensify again.

Strait of Hormuz remains central to oil markets

The Strait of Hormuz has become the focal point of the oil market because of its importance to global energy transportation.

Before the conflict, around 20 million barrels of oil per day moved through the waterway. The IEA said flows fell sharply following the outbreak of hostilities on February 28, creating a major disruption to global oil supplies.

The agency said the disruption forced Gulf producers to reduce production while alternative export routes and increased supplies from producers outside the region helped cushion some of the impact.

In its latest analysis, the IEA said flows through Hormuz averaged 7.6 million barrels per day in August, about 13.1 million barrels per day below pre-war levels. It estimated cumulative export losses through the waterway at nearly 2.8 billion barrels.

That makes any development affecting the possibility of reopening the waterway particularly important for crude prices.

Oil market volatility remains high

Crude prices have swung sharply throughout the conflict as traders have reacted to changing signals about military action, ceasefire arrangements and negotiations between Washington and Tehran.

The IEA said North Sea Dated crude reached an all-time high of $144 a barrel earlier in the crisis, more than double its pre-war level, before easing as expectations of an agreement and alternative supply arrangements reduced some of the pressure.

The latest increase shows how quickly those gains can return when hopes for a diplomatic resolution weaken.

For consumers and oil-importing economies, sustained higher crude prices can raise the cost of petrol, diesel, aviation fuel and other petroleum products. They can also increase transportation and production costs across industries, adding to inflationary pressure.

India faces potential impact from higher crude prices

India, as a major importer of crude oil, remains particularly sensitive to international oil-price movements.

A sustained increase in Brent prices can affect the country’s import bill and put pressure on the rupee and domestic fuel-market economics. Higher crude prices can also feed into transportation and logistics costs, with possible knock-on effects on prices of goods and services.

The immediate impact on Indian fuel prices, however, depends on several factors, including domestic pricing decisions, exchange-rate movements, refinery economics and the duration of the international price surge.

For consumers, the key issue is therefore not only the day’s move in Brent but whether elevated prices persist.

Diplomacy remains a key market trigger

The next phase of US-Iran diplomacy is likely to remain closely watched by oil traders. Any indication of an agreement that allows shipping through Hormuz to normalise could ease supply fears and put downward pressure on crude prices.

Conversely, renewed military action or further restrictions on the waterway could intensify concerns about supply availability.

At present, the two sides continue to issue conflicting messages. Iran says it remains open to diplomacy while preparing for renewed conflict, while Trump has rejected Tehran’s latest proposal but has indicated that further discussions could take place.

That uncertainty is likely to keep crude oil markets highly sensitive to every development from Washington and Tehran.