Oil prices surged more than 3% following U.S. President Donald Trump’s rejection of an Iranian peace proposal that sought to resolve ongoing conflicts and reopen the Strait of Hormuz. Brent crude futures experienced a significant rise, climbing $3.98, or 3.82%, to reach $108.30 a barrel. Similarly, U.S. West Texas Intermediate (WTI) increased by $3.52, or 3.81%, to settle at $95.93 a barrel.
The spike in oil prices came after President Trump dismissed Iran’s peace initiative, though he left the door open for potential talks with Tehran later this week. This development has dampened hopes for an immediate diplomatic resolution while maintaining the possibility of continued negotiations.
Iran’s proposal was presented at the recent UN General Assembly and reportedly communicated to the United States through Qatari intermediaries. The lack of resolution has heightened concerns about potential disruptions to oil supplies and shipping lanes through the critical Strait of Hormuz.
Regional tensions remain high as Saudi Arabia’s coalition reported intercepting ballistic missiles and drones launched by Iran-backed Houthi forces targeting Saudi territory. Despite these tensions, crude exports from major Middle Eastern producers rose in September, reaching approximately 12.8 million barrels per day. Shipments through the Strait of Hormuz also recovered, alleviating some fears of supply interruptions.
Market participants are closely monitoring developments in U.S.-Iran negotiations and the security of vital oil shipping routes, as these factors could significantly influence crude prices in the days ahead.