Oil Prices Surge as Trump Rejects Iran Peace Response

Oil Futures Jump on Renewed Geopolitical Risk

As of 01:37 ET (5:37 GMT) on Monday, Brent Oil Futures rose 4.2% to $105.55 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 4.8% to $100.00 per barrel. Both benchmarks had fallen more than 6% in the previous week amid expectations that the United States and Iran were nearing a temporary agreement to stabilize Gulf shipping routes.

The latest price spike followed comments from Trump on Sunday rejecting Tehran’s counterproposal to Washington’s peace framework. He described Iran’s response as “totally unacceptable,” reducing expectations for a near-term easing of tensions in the Gulf region.

Analysts at ING noted that, despite the frequent flow of headlines, oil prices “remain highly sensitive to noise around Iran,” underscoring the market’s focus on ongoing supply disruptions in the Persian Gulf. The Strait of Hormuz, a key chokepoint for global crude shipments, has remained largely shut since the start of the conflict, according to the report.

Peace Proposal Stalemate and China’s Diplomatic Role

According to details reported in the source, the original U.S. proposal sought a 20-year halt to Iran’s uranium enrichment, removal of highly enriched uranium stockpiles, and dismantling of key nuclear facilities, in exchange for sanctions relief and an end to military action. Iran’s response, reportedly delivered via Pakistani mediators, called for lifting sanctions, ending the U.S. naval presence around the Strait of Hormuz, providing security guarantees, and recognizing Iran’s right to continue some nuclear activity. The Wall Street Journal was cited as reporting that Iran proposed diluting part of its highly enriched uranium and transferring the remainder to a third country.

Beijing confirmed on Monday that Trump will visit China between May 13 and 15 for talks with President Xi Jinping. The summit is expected to focus on trade, Taiwan, and the Iran conflict, with China viewed as a significant diplomatic actor due to its economic ties with Tehran. ING analysts said there was a “glimmer of hope” that the Trump-Xi meeting could help move Iran closer to a peace deal, suggesting China might use its influence in this direction.

Separately, China’s April trade data showed crude oil imports falling 20% year-on-year to the lowest level since July 2022, adding another data point to the global oil market backdrop.

FAQ

Why did oil prices rise on Monday?
Oil prices rose nearly 5% in Asian trading after U.S. President Donald Trump rejected Iran’s response to a U.S. peace proposal, heightening geopolitical risk and reinforcing concerns about supply disruptions in the Persian Gulf.

How much did Brent and WTI futures move?
As of 01:37 ET (5:37 GMT), Brent Oil Futures were up 4.2% at $105.55 per barrel, while U.S. West Texas Intermediate crude futures increased 4.8% to $100.00 per barrel.

What are the key points of the U.S. and Iranian proposals?
The U.S. proposal reportedly included a 20-year halt to uranium enrichment, removal of highly enriched uranium stockpiles, and dismantling of key nuclear facilities in exchange for sanctions relief and an end to military action. Iran’s response reportedly sought lifting of sanctions, withdrawal of the U.S. naval presence around the Strait of Hormuz, security guarantees, and recognition of its right to continue some nuclear activity.

How is China involved in the Iran situation?
China is seen as a key diplomatic player due to its economic ties with Iran. Trump is scheduled to visit China between May 13 and 15 to meet President Xi Jinping, and analysts see a possibility that Beijing could use its influence with Tehran to support progress toward a peace deal.