Oil Prices Surge Above $100 After Trump Rejects Iran Peace Proposal
Oil prices moved sharply higher on Monday after President Donald Trump rejected Iran’s latest response to a U.S.-backed peace proposal, keeping geopolitical tensions elevated across global energy markets.
By 05:55 ET (09:55 GMT), Brent Crude futures had climbed 2.6% to $103.87 per barrel, while West Texas Intermediate crude rose 2.5% to $97.77 per barrel.
The rally followed heavy losses last week, when both oil benchmarks dropped more than 6% amid hopes that Washington and Tehran were close to reaching a temporary agreement to stabilize Gulf shipping routes.
Trump Rejects Iran Counterproposal
On Sunday, President Trump publicly dismissed Tehran’s latest counteroffer to the U.S. peace framework, stating that he did not “like” the proposal and later describing it as “TOTALLY UNACCEPTABLE.”
According to reports, the original U.S. proposal called for a 20-year suspension of Iran’s uranium enrichment program, the removal of highly enriched uranium stockpiles, and the dismantling of key nuclear facilities in exchange for sanctions relief and an end to military operations.
Iran’s response, reportedly delivered through Pakistani mediators, demanded several concessions from Washington.
These included the lifting of sanctions, the withdrawal of U.S. naval forces near the Strait of Hormuz, security guarantees, and recognition of Iran’s right to continue limited nuclear activity.
The Wall Street Journal also reported that Iran proposed diluting part of its enriched uranium reserves while transferring the remaining stockpile to a third country.
Strait of Hormuz Remains a Major Market Concern
Investors continue closely monitoring the Strait of Hormuz, one of the world’s most critical oil shipping routes.
Roughly 20% of global oil supplies move through the narrow waterway, which has remained largely disrupted during the conflict.
The ongoing instability has pushed oil prices well above pre-war levels, increasing fears of rising inflation, higher transportation costs, and weaker global economic growth.
Analysts at ING Group noted that despite the constant stream of geopolitical headlines, oil markets remain extremely sensitive to developments involving Iran due to the significance of supply disruptions in the Persian Gulf.
Trump-Xi Talks Could Influence Iran Negotiations
Elsewhere, Beijing confirmed that President Trump will visit China later this week for talks with Chinese President Xi Jinping.
The meeting is expected to cover several major geopolitical topics, including trade relations, Taiwan, and the ongoing Iran conflict.
Analysts believe China could potentially play an important diplomatic role given its strong economic relationship with Tehran.
ING analysts suggested there is still a “glimmer of hope” that discussions between Trump and Xi could help move Iran closer toward a peace agreement.
China’s Oil Imports Decline Sharply
Meanwhile, newly released Chinese trade data showed that China’s crude oil imports fell 20% year-over-year in April, reaching their lowest level since July 2022.
The weaker import figures reflect slowing demand conditions as well as ongoing disruptions in global energy markets tied to the Middle East conflict.
