Kathmandu— Oil prices surged on Monday as hopes for a swift reopening of the strategically important Strait of Hormuz diminished, following Iran’s demands for concessions from the United States. Brent crude futures rose more than $2 per barrel, reaching $84.64, while US West Texas Intermediate crude also increased to $80.63. The gains come after a temporary dip in prices last week when negotiations appeared promising, and coincide with rising oil and gas stock values in US markets. Analysts warn that continued closure of the strait could quickly drive up gasoline prices for American consumers, erasing recent savings at the pump.

Strait Closure Drives Price Increases

The increase in oil prices reflects a growing concern over the prolonged closure of the Strait of Hormuz, a critical chokepoint for global oil supply. Iran has linked reopening the strait to demands including an end to military threats and sanctions, as well as financial compensation. Despite the continued closure, SEB Research analysts noted that oil is currently trading between $80 and $85 per barrel, suggesting some expectation of a near-term resolution.

Gasoline Prices See Brief Relief

US consumers experienced a slight reprieve last week, with gasoline prices falling nine cents to an average of $4.00 per gallon, according to the American Automobile Association (AAA). This decrease followed initial optimism that a deal to reopen the Strait of Hormuz was within reach. However, Patrick De Haan, head of petroleum analysis at GasBuddy, cautioned that this relief may be short-lived.

Stock Market Responds to Oil Price Surge

The rising oil prices have spurred gains in US oil and gas stocks as trading began for the week. ExxonMobil saw a 2.9 percent increase in midday trading, while Chevron rose 3.1 percent. BP and Shell also experienced gains of 2.1 and 1.2 percent respectively, with ConocoPhillips climbing 2.7 percent since market open.

The situation surrounding the Strait of Hormuz remains fluid, and further developments in negotiations between Iran and the United States will likely dictate future oil prices and gasoline costs for consumers.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.