Oil prices climbed more than 1% on Monday after US President Donald Trump rejected Iran’s peace proposal aimed at ending tensions and reopening the Strait of Hormuz. Brent crude futures rose $1.32, or 1.27%, to $105.64 a barrel by 0036 GMT, while US West Texas Intermediate crude gained 70 cents, or 0.76%, to $93.11 a barrel.
Iran announced the peace deal last week at the UN General Assembly in New York. The proposal was reportedly sent to the US through Qatari mediators. Trump said on Saturday he rejected the plan but told Axios in a phone interview on Sunday that he expected US negotiators to hold more talks this week.
Analysts at ANZ said geopolitical risks remain high. “The Houthis and Iran continued their attacks on Saudi Arabia, leaving regional supply flows vulnerable,” they wrote in a note.
The Saudi-led coalition in Yemen said early Saturday it intercepted two ballistic missiles and two drones launched by the Iran-backed Houthis targeting the kingdom.
Last week, Brent crude rose by 0.4%, but WTI fell 7.9% amid concerns the US might ban diesel exports to ease rising prices. ANZ analysts wrote that refined oil products remain a pressure point, with record US diesel prices raising inflation risks and sparking debate over possible export restrictions.
Any US diesel export curbs would tighten supply outside the country. European prices have already reacted to the prospect of reduced American supply, the analysts added.
Meanwhile, crude exports from major Middle East producers rose in September to 12.8 million barrels per day, the highest level since the war began in February, according to preliminary data from Kpler. Saudi Arabia and the United Arab Emirates increased their shipments.
This rebound followed a recovery in shipments through the Strait of Hormuz, which are expected to reach about 7.4 million barrels per day this month. Saudi Arabia shifted exports from the Red Sea port of Yanbu to its eastern Ras Tanura port after attacks damaged its East-West pipeline.
The deadlock in US-Iran talks and ongoing regional attacks keep oil markets unsettled. The potential US diesel export ban adds another layer of uncertainty as global supplies adjust to shifting routes and political tensions.
According to Joy Online.
