• Oil prices surged over 7% as tensions flared between the US and Iran.
• The Strait of Hormuz has been closed again, impacting global oil supply.
• US stock futures fell amid the uncertainty over peace negotiations.

Oil prices jumped significantly on Monday morning, with Brent crude futures soaring over 7 percent amid rising tensions in the Strait of Hormuz. The benchmark was reported at approximately $96.85 a barrel, while West Texas Intermediate showed a similar surge. Analysts attribute this volatility to conflicting messages regarding US-Iran peace negotiations and Iran's decision to close the strait again after a brief reopening. This strait is crucial as about 20% of the world's oil passes through it, making its accessibility vital for global energy supplies, according to Channel News Asia and BBC.

The escalation followed US President Donald Trump's announcement that the US intercepted an Iranian cargo vessel attempting to bypass a naval blockade. This action, coupled with previously reported attacks on vessels in the strait, raised fears among investors, leading to a perceived shift in market attitude. As a result, the US dollar also rose, reflecting investor caution in light of the ongoing conflict, according to Al Jazeera and Channel News Asia.

Despite a recent surge in optimism for US markets due to strong earnings reports, the outlook has dimmed following these developments. Stock futures exhibited declines, with the S&P 500 and other major indices showing signs of losing momentum as Wall Street anticipates ongoing conflict may further impact economic stability. Analysts have indicated that the positive sentiment might be overly optimistic considering the underlying geopolitical risks, which could lead to further corrections in market pricing, according to Channel News Asia and BBC.

Iran's swift reversal from having stated the strait's reopening to its closing again adds another layer of complexity to the situation. Tehran cited the US blockade as a significant barrier to cooperation, further complicating ongoing negotiations designed to reach a lasting ceasefire. Observers noted that unless a resolution is reached by Wednesday, the ceasefire may lapse, exacerbating oil supply concerns globally, according to Al Jazeera and Channel News Asia.