Brent Crude Jumps Over 3% After Trump Rejects Iran Offer

Brent crude prices jumped more than three per cent on Monday after US President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz.

The international benchmark rose above $107 a barrel in early European trading as markets reacted to renewed uncertainty over oil supplies from the Middle East.

Iran had proposed a seven-day truce that would allow the Strait of Hormuz to reopen, with Tehran attaching conditions including the lifting of sanctions and other measures.

Trump rejected the proposal over the weekend, saying the terms offered by Iran were not acceptable to Washington. He nevertheless indicated that further negotiations could take place.

The development reversed some of the optimism that had pushed oil prices lower towards the end of last week, when markets responded positively to signs that the two sides could reach an arrangement over the strategic waterway.

The Strait of Hormuz remains central to the global energy market because it is a major route for crude oil and other petroleum shipments from the Persian Gulf.

Uncertainty over shipping through the waterway has raised concerns about possible disruptions to global supplies and increased pressure on energy prices.

US benchmark West Texas Intermediate also moved higher, trading above $94 a barrel during Monday’s early session.

The latest price movement also reflects broader concerns about inflation, particularly as higher crude prices can increase transportation, fuel and production costs.

Iran has maintained that it is prepared to consider negotiations while insisting on conditions for reopening the waterway. The US, meanwhile, has rejected the latest proposal but has indicated that diplomatic contacts could continue.

Analysts said the direction of oil prices would depend heavily on developments surrounding the conflict, the status of negotiations and the movement of vessels through the Strait of Hormuz.

The renewed rise in crude prices comes after Brent had fallen by more than two per cent on Friday following reports of Iran’s proposal.

With the diplomatic situation still uncertain, traders are closely monitoring developments for signs of either a further disruption to energy supplies or progress towards reopening the strategic shipping route.