WTI Crude Pulls Back Toward $95 After Iran Proposal on Strait of Hormuz

Oil Prices React to Shifting US–Iran Signals

WTI crude futures traded lower toward $95 per barrel after earlier gains to as high as $96.7 on Monday. The retreat came after reports that Iran had delivered a new proposal to the US, via Pakistani mediators, focused on reopening the Strait of Hormuz and de-escalating the conflict.

According to these reports, the Iranian proposal calls for an extension of the existing ceasefire to enable negotiations toward a permanent end to hostilities. At the same time, it would postpone nuclear talks until the US blockade of the strait is lifted.

Earlier in the session, oil prices had risen sharply after US President Donald Trump instructed negotiators to suspend discussions. In parallel, Iranian President Masoud Pezeshkian reiterated that Tehran would not participate in what he termed “imposed negotiations under threats or blockade.”

Energy Supply Shock and Global Macro Impact

The conflict involving Iran has now entered its ninth week. The International Energy Agency (IEA) has characterized the resulting disruption as the largest energy supply shock on record.

This supply shock has been amplifying inflationary pressures, as elevated energy costs feed through into broader price levels. In addition, the ongoing disruption and uncertainty around the Strait of Hormuz are weighing on the global growth outlook, as markets assess potential impacts on trade flows, input costs, and economic activity.

WTI crude’s intraday volatility on Monday highlights the sensitivity of oil benchmarks to political and diplomatic developments in the region. Market participants are closely tracking signals around ceasefire terms, the status of the US blockade, and any progress toward a more durable resolution of hostilities, given their direct implications for energy supply conditions.

FAQ

Why did WTI crude futures pull back from intraday highs?
WTI crude futures eased back toward $95 per barrel after reports that Iran had submitted a new proposal to the US aimed at reopening the Strait of Hormuz and de-escalating the conflict, following an earlier spike to $96.7.

What does Iran’s reported proposal include?
The reported proposal, conveyed through Pakistani mediators, seeks an extension of the ceasefire to pursue a permanent end to hostilities, while delaying nuclear talks until the US blockade of the Strait of Hormuz is lifted.

How has the conflict affected the global energy market?
The conflict, now in its ninth week, has triggered what the IEA describes as the largest energy supply shock on record, contributing to higher inflationary pressures and weighing on the global growth outlook.

What recent actions have the US and Iran taken in the negotiations?
US President Donald Trump instructed negotiators to suspend discussions, while Iranian President Masoud Pezeshkian stated that Iran would not engage in “imposed negotiations under threats or blockade.”