Negotiations between Washington and Tehran appeared to reach a deadlock after President Donald Trump rejected Iran's response to a U.S. proposal on Sunday, describing their demands as 'totally unacceptable'.
According to Iranian media reports, the plan submitted by Tehran emphasized the necessity of ending the war on all fronts, lifting sanctions, paying reparations, and recognizing Iranian control over the waterway.
Iran has effectively shuttered this strategic passage since the outbreak of hostilities in late February, severing a bottleneck through which approximately one-fifth of global oil and gas consumption typically flows.
'Behind the harsh Iranian response could be a confidential CIA analysis leaked to the press, which claims that Iran can withstand the U.S. naval blockade for at least three or four months before facing severe economic hardship, with the capacity to export crude via land routes through Central Asia and with 70-75% of its military capacity intact,' noted brokerage Renta 4.
'If this analysis is correct, the asymmetry of urgency between the two parties is decisive. Trump needs to resolve the conflict as soon as possible (gasoline prices are at 2022 highs even before the start of the 'driving season', the period of peak demand in the U.S., complicating Trump's position ahead of the mid-term elections on November 3), while Iran can afford to wait,' they added in their morning report.
Against this backdrop, crude oil rose sharply on international markets: Brent climbed 4.5% during the Asian session to 105.87 dollars per barrel, while U.S. crude advanced 5% to 100.24 dollars.
The spike in oil prices increases the risk of higher inflation and, consequently, the likelihood that interest rates will remain elevated for longer.
This scenario was reinforced by Friday's U.S. jobs report, which showed non-farm payrolls increased by 115,000 in April—nearly double the expected figure—solidifying expectations that the Federal Reserve will keep rates unchanged for the time being.
Market attention is also turning to Trump's visit to China starting Wednesday, where he will meet President Xi Jinping for their first face-to-face encounter in over six months.
The agenda includes the Persian Gulf conflict, bilateral trade, Taiwan, artificial intelligence, nuclear weapons, and the potential extension of an agreement on critical minerals.
Despite the general climate of uncertainty, some technology and digital stocks continued to trend higher in Asia, driven by the boom in artificial intelligence, particularly among semiconductor and memory manufacturers.
On the corporate front, the week brings a significant earnings calendar. In the United States, networking equipment firm Cisco and semiconductor equipment maker Applied Materials are set to report, with Nvidia and Walmart following later in the month.
In Spain, ArcelorMittal, Aena, and ACS will present their accounts on Tuesday, followed on Thursday by Merlin Properties, Telefónica, and Colonial, among others.
At 0705 GMT on Monday, Spain's benchmark IBEX 35 was down 37.70 points, or 0.21%, at 17,851.70 points, while the pan-European FTSE Eurofirst 300 index remained unchanged.
In the banking sector, Santander lost 0.55%, BBVA edged up 0.03%, Caixabank advanced 0.14%, Sabadell gained 0.42%, Bankinter rose 0.25%, and Unicaja Banco shed 0.29%.
Among non-financial heavyweights, Telefónica was flat, Inditex slipped 0.43%, Iberdrola dropped 0.69%, Cellnex fell 0.25%, and oil major Repsol climbed 0.36%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
