Brent crude surged Monday, hitting $108.48 a barrel at 6:35 a.m. ET — a gain of 4% — after President Donald Trump turned down Tehran's proposal to reopen the Strait of Hormuz. U.S. West Texas Intermediate futures rose 4% to $96.16 a barrel.
Trump acknowledged the decision to reporters on Saturday, saying simply, "They made a proposal but I rejected it," according to CNBC.
Earlier, while departing the White House via Marine One, Trump had framed Iran's motivation in blunt terms, saying the country was "dying" and had "no money coming in." "They outsmarted themselves," Trump added. "They said, 'Let's close it and cause a problem for the world.'
And I came along, and we put up the greatest blockade ever in military history."
The Wall Street Journal, citing unnamed U.S. officials, reported Saturday that Trump had rejected the offer and told aides he expects U.S. strikes on Iran to resume after November's midterm elections, according to NBC News.
Iranian Foreign Minister Abbas Araghchi unveiled the proposal Friday at the United Nations General Assembly in New York, where he was attending meetings on the sidelines. Under the plan, Iran would reopen the strait and restart nuclear talks within seven days if the U.S. met a set of conditions — including an end to U.S. military strikes, the lifting of the naval blockade and economic sanctions, and the release of Iranian assets. Araghchi said Saturday that Tehran had yet to receive any formal response through the official mediation process, noting that Iran was still awaiting word from Qatar, which has served as go-between, on Washington's final stance.
A U.S. official told NBC News on Friday that talks through intermediaries were going well but that Washington saw no urgency in striking a deal. "The United States is in a very strong position with control of the Strait of Hormuz," the official said, pointing out that close to 40 million barrels of oil had moved through the waterway over the preceding 48 hours.
Before the U.S. and Israel launched strikes on Iran on Feb. 28, roughly one-fifth of global oil supplies flowed through the Strait of Hormuz each day, according to Al Jazeera. Commercial shipping in the waterway has declined since the start of the war. According to maritime intelligence platform MarineTraffic, the strait saw 132 ship passages between September 21 and 27, an improvement over the 116 logged the week before, though still a fraction of the approximately 130 daily crossings that were typical before the war.
Energy markets are pricing in a heightened risk of resumed U.S.-Iran hostilities after the midterm elections, according to CNBC. Cornelia Meyer, CEO of Meyer Resources, said Monday that "a lot of countries are living off their inventories" and that markets were treating the danger as real and immediate. Trump had said earlier this month he expected the conflict to conclude soon after the elections, a statement that had pushed oil prices lower at the time.
Trump told reporters Tuesday that American and Iranian representatives met for three hours on the sidelines of the UN General Assembly in New York, calling it a "very good meeting," while also saying he faced a "big decision" over whether to pursue a deal with Tehran or "annihilate" the country.
– with Agencies inputs --
