Oil prices surged over 3% as US President Donald Trump dismissed an Iranian peace proposal that aimed to resolve tensions in the Middle East and reopen the critical Strait of Hormuz. Brent crude futures rose by $3.98, reaching $108.30 per barrel, while US West Texas Intermediate (WTI) climbed $3.52 to settle at $95.93 per barrel.
The increase in oil prices follows Trump’s rejection of Iran’s proposal, though he indicated that US negotiators might continue discussions with Tehran in the coming week. This development has tempered expectations for an immediate diplomatic breakthrough, maintaining a degree of uncertainty over the talks.
Iran’s proposal was initially presented at the UN General Assembly and communicated to the United States through Qatari mediators. The ongoing uncertainty regarding these negotiations has heightened concerns about potential disruptions to oil supplies and shipping activities through the Strait of Hormuz, a vital artery for global oil transport.
Regional tensions have been further exacerbated by reports from Saudi Arabia’s coalition, which claimed the interception of ballistic missiles and drones launched by Iran-backed Houthi forces targeting Saudi territory.
Meanwhile, crude exports from key producers in the Middle East experienced an uptick in September, with shipments rising to approximately 12.8 million barrels per day. This increase in supply passing through the Strait of Hormuz has helped alleviate some fears regarding supply disruptions.
As the situation unfolds, market participants remain focused on the evolving US-Iran negotiations and the security of essential oil shipping routes, both of which are likely to continue influencing crude prices in the near future.