FEATURE | Oil prices hold rally as UAE's OPEC exit offsets Middle East supply risks

US President Donald Trump, meanwhile, was unhappy with the latest Iranian proposal to end the war, a US official said on Monday, as Iranian sources disclosed that it avoided addressing the nuclear programme until hostilities cease and Persian Gulf shipping disputes are resolved.

Trump's displeasure with the offer leaves the conflict deadlocked, with Iran shutting shipping flows through the strait, a conduit for about 20 per cent of global oil and liquefied natural gas supplies, and the US retaining its blockade of Iranian ports.

"With peace talks stalled and no clear path to reopening the Strait of Hormuz, traders are factoring in a prolonged disruption to a critical artery of global supply," said Rystad Energy analyst Jorge Leon.

"Even in a best-case scenario, any US–Iran agreement is likely to be narrow and partial, leaving the strait issue unresolved, which means the upside risks to prices remain."