Oil prices are back above $100 U.S. a barrel after Israeli Prime Minister Benjamin Netanyahu and U.S. President Donald Trump each said the Iran war is "not over."
The comments were made after the U.S. and Israel rejected a peace plan put forward by Iran. The situation raises fears that ongoing war in the Middle East could threaten energy supplies.
"I have just read the response from Iran's so-called ‘Representatives.' I don't like it — TOTALLY UNACCEPTABLE!" wrote Trump on social media over the weekend.
Following the comments, Brent crude oil, the international benchmark, rose more than 2% to $103.93 U.S. per barrel.
West Texas Intermediate (WTI) crude oil, the U.S. standard, also advanced more than 2% to $97.88 U.S. per barrel.
Citigroup (NYSE:$C) wrote in its latest oil report that crude prices could rise further if Iran and the U.S. do not agree a deal soon.
To date, crude markets have been cushioned by high inventory levels, strategic petroleum reserve releases, weaker demand in developing countries, and hopes for a de-escalation.
However, Citigroup stresses that risks to oil prices remain tilted to the upside as Iran retains control over the Strait of Hormuz shipping route.
In its note to clients, Citigroup writes: "We assume that the regime will make a deal that reopens the Strait around end-May … but we continue to see disruptions for longer."
Both WTI and Brent crude oil are up about 40% since the U.S. and Israeli-led war against Iran began on Feb. 28 of this year.
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