Crude oil prices climb as Trump rejects Tehran’s proposal to reopen the Strait of Hormuz, raising concerns over global energy supplies and the outlook for US-Iran peace talks
Oil prices rose more than 1 per cent on Monday after US President Donald Trump rejected Iran’s proposal to reopen the Strait of Hormuz and resume peace talks, raising concerns over prolonged disruptions to global energy supplies.
Brent crude futures for December delivery rose 1.23 per cent to $98.64 a barrel, while US West Texas Intermediate (WTI) crude futures for November delivery gained 1.06 per cent to $93.39 a barrel, according to the latest market data provided.
The gains followed Trump’s rejection of Tehran’s proposal to resolve the conflict and reopen the strategic waterway. The move has raised uncertainty over when shipping through the strait could return to normal.
Why did Trump reject Iran’s proposal?
Iran had proposed reopening the Strait of Hormuz and restarting negotiations within seven days, subject to conditions including the lifting of the US naval blockade on Iranian ports, easing restrictions on Iranian oil sales and a ceasefire across the region.
Trump rejected the proposal on Saturday, saying the terms were unacceptable. He also said Iran had overplayed its hand, according to media reports.
However, Trump told Axios on Sunday that he expected negotiations with Iran to resume this week, offering some indication that diplomatic efforts could continue despite the rejection.
More from BusinessIran, meanwhile, has maintained that a diplomatic solution is possible but has said the reopening of the strait depends on its conditions being met.
Iranian Foreign Minister Abbas Araghchi said on Sunday that Tehran remained committed to negotiations and that the conditions for reopening the waterway were unchanged.
Why is the Strait of Hormuz important for oil prices?
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and is a critical route for global crude oil and energy shipments.
A significant share of the world’s oil exports passes through the narrow waterway, making it central to global energy security. Disruptions to shipping through the strait can restrict supplies and push up crude prices.
The conflict involving the US, Israel and Iran has disrupted maritime traffic through the waterway, raising concerns about the availability of oil in global markets.
A prolonged disruption could keep energy prices elevated and add to costs for oil-importing economies, including India.
