Iran's supreme national security council secretary Ali Larijani today said that Tehran will not negotiate with the US, as the widening conflict in the Mideast Gulf sharply raised the risk of disruptions to oil and gas supply.
"We will not negotiate with the United States," Larijani said in a post on social media platform X. His comments were an apparent reference to a report in the Wall Street Journal, which said he had made a fresh attempt to resume talks with Washington via Omani mediators.
The war between the US and Israel on one side and Iran on the other has entered its third day, with Mideast Gulf oil producers coming under missile and drone attack from Iran. Flights have been disrupted across the Middle East and beyond and several key airports, including in Dubai and Doha, have been temporarily closed.
Brent crude futures initially rose to a high of $82.17/bl as trading resumed in Asia on Monday following a weekend of escalating violence in the Middle East. Prices have since eased, trading up 9.2pc at $79.59/bl at 07:10 GMT.
The hostilities are threatening to disrupt supplies of oil and other commodities from the region. At least three vessels have been hit by explosive projectiles near the strait of Hormuz since the conflict began. Port infrastructure has also sustained damage, including at Duqm's commercial port in Oman.
US President Donald Trump on Sunday told The Atlantic magazine that Iran's new leadership had offered to hold talks in the wake of US-Israeli strikes on the country, and that he had agreed. But Trump later said the US would continue its military operations against Iran until "all our objectives are achieved." He did not elaborate on those objectives, describing them only as "strong" in a video update posted on his social media platform.
The impact of the hostilities on oil prices outweighed a decision by eight core Opec+ members to resume increasing crude output in April following a three-month pause, even as tensions pose a direct risk to regional supply flows.
Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan agreed on Sunday to raise their collective crude production ceiling by 206,000 b/d, a slight acceleration from the previous monthly increases of 137,000 b/d agreed for October, November and December.
Israel-Hezbollah conflict reignites
Israel on Monday launched a military campaign against Iran-backed Hezbollah militants in Lebanon after Hezbollah acknowledged firing missiles and drones toward Israel in retaliation for the killing of Iran's Supreme Leader Ali Khamenei.
Lebanese president Joseph Aoun criticized Hezbollah's move. "While we condemn Israeli aggression on Lebanese territory, we warn that persisting in using Lebanon once again as a platform for proxy wars in which we have no involvement will expose our country to renewed risks," he said. "Responsibility falls on the parties that ignored repeated calls to preserve security and stability."
Prime minister Nawaf Salam condemned the attack as irresponsible and said the government would not allow the country to be "dragged into new adventures."
Israel carried out air strikes on Hezbollah-controlled southern suburbs of Beirut on Monday, with more than a dozen explosions reported in the capital. Israel said it also struck senior Hezbollah militants near Beirut.
Israel and Lebanon had agreed to a US-brokered ceasefire in 2024 after more than a year of fighting that left Hezbollah significantly weakened.
The conflict could widen further. The Cypriot government said early on Tuesday that an unmanned drone struck the UK's Royal Air Force base at Akrotiri on Cyprus' southern coast. The strike came after the UK gave permission to the US to use British bases in and around the Middle East Gulf region to assist in countering the threat of Iranian missiles and drones.
