Oil prices are up around 6% Sunday evening after the weekend brought fresh escalation of the U.S.-Iran conflict.
Why it matters: The jump after international markets opened reverses a large chunk of the sharp decline Friday, when President Trump and Iran's foreign minister claimed the Strait of Hormuz was opening to tanker traffic.
- The longer oil transit remains throttled, the longer crude prices will remain high.
- That affects U.S. drivers, because the county is deeply tethered to the global oil market despite being the world's largest producer.
The latest: The global benchmark Brent crude surged to $95.42 Sunday night, while WTI, the main U.S. reference, reached $89.77.
- Both remained hovering around those prices late Sunday.
Catch up quick: American forces seized an Iranian-flagged cargo ship after it tried to bypass a U.S. naval blockade in the Gulf of Oman, President Trump said Sunday.
- It's the first seizure and the first ship fired upon since the U.S. blockade went into effect last Sunday — in response to Iran effectively holding the Strait or Hormuz hostage since the war began on Feb. 28.
- And Iran said on Saturday that the Strait is again closed to traffic following threats of such action if the U.S. continued its blockade of the shipping channel.
Reality check: Even before the weekend's developments, analysts were questioning whether the Friday announcements were anywhere near enough to provide ship owners the confidence needed to resume transit.
What they're saying: U.S. average gasoline prices may not return to pre-Iran war levels under $3-per-gallon until next year, Energy Secretary Chris Wright said Sunday morning.
- "But prices have likely peaked, and they'll start going down, certainly with a resolution of this conflict, you'll see prices go down," he said on CNN's "State of the Union."
- Wright added that under $3 is "pretty tremendous" in inflation-adjusted terms. He argued the Trump administration has successfully managed the historic disruption.
By the numbers: U.S. gasoline prices reached their highest point so far this year at $4.16 per gallon earlier this month and now are at $4.05, per AAA data.
- Wright said the highest point this year is still about $1 below the Biden-era peak in 2022. (Per AAA, the 2022 peak was about $5.02, compared to $4.16 this month.)
What we're watching: Vice President JD Vance will lead a U.S. delegation for another round of talks with Iran in Islamabad before the ceasefire is scheduled to end on Tuesday night, two U.S. officials told Axios.
- The talks could provide an eleventh hour opportunity to reach a deal, or at least extend the ceasefire — though Iran has yet to confirm its participation and is concerned this is all subterfuge to provide cover for a U.S. surprise attack.
Editor's note: This article has been updated to reflect oil prices late Sunday.
