Oil prices rose more than 1% in early Monday trading in Asia following U.S. President Donald Trump’s rejection of a peace proposal from Iran that sought to end the ongoing Middle East conflict and reopen the strategic Strait of Hormuz.
U.S. crude futures for November delivery increased by 1.3% to $93.62 a barrel, while the international benchmark Brent crude gained 1.8% to reach $106.31 a barrel.
According to a report by The Wall Street Journal on Saturday, citing unnamed U.S. officials, Trump declined Iran’s conditional offer to reopen the vital shipping lane. The report indicated that the president has informed aides he anticipates U.S. strikes on Iran to resume after the upcoming midterm elections in November.
Trump subsequently confirmed the rejection to reporters, stating, “They made a proposal but I rejected it.”
The diplomatic maneuvering began on Friday when Iranian Foreign Minister Abbas Araghchi proposed reopening the shipping route and restarting nuclear negotiations with Washington within a seven-day window. Speaking at the United Nations General Assembly in New York, Araghchi said, “If certain conditions are met, the Strait of Hormuz will be open at the end of seven days, and talks will be restarted.}
Iranian foreign ministry spokesman Esmaeil Baghaei outlined the conditions required by Tehran, which include an end to what it describes as U.S. “acts of aggression,” the lifting of a naval blockade, the cessation of economic warfare, and the release of frozen Iranian assets.
Meanwhile, Yemen’s Saudi-led coalition announced on Saturday that it had intercepted projectiles launched by Houthi rebels, who are backed by Iran. This development adds to the regional tensions that have characterized the conflict since U.S. and Israeli airstrikes targeted Iran on February 28.
Earlier this month, Trump expressed an expectation that the conflict would conclude shortly after the midterm elections, a sentiment that had previously contributed to a decline in oil prices. The recent rejection of the peace deal has reversed that downward trend.
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