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Oil markets react to diplomatic stalemate
Global oil prices climbed sharply on Monday after U.S. President Donald Trump dismissed Iran's peace proposal as "totally unacceptable," raising fresh concerns over supply disruptions in the Persian Gulf.
Iran's conditions for ending conflict
Tehran delivered its response to Washington via Pakistan, which has mediated talks between the two nations. According to Iran's semi-official Tasnim news agency, the proposal demanded an immediate ceasefire and guarantees against future U.S. or Israeli military strikes.
Trump responded on social media, stating, "I have just read the response from Iran's so-called 'Representatives.' I don't like it - TOTALLY UNACCEPTABLE."
U.S. and Israeli demands
Axios reported that Washington's terms included the reopening of the Strait of Hormuz-a critical chokepoint for global energy shipments-and a halt to Iran's nuclear enrichment activities. Israeli Prime Minister Benjamin Netanyahu reinforced this stance, insisting the conflict would persist until Iran's uranium stockpiles were dismantled.
Strait of Hormuz remains closed
The waterway, which typically handles about 20% of the world's oil and gas shipments, has been effectively blockaded since the war began on February 28. Tehran has threatened to target vessels attempting to traverse the strait in retaliation for U.S.-Israeli airstrikes, exacerbating supply chain disruptions.
A ceasefire declared in early April to facilitate negotiations has largely held, though sporadic clashes have occurred. Trump extended the truce indefinitely on April 21 to allow Iran time to present a "unified proposal."
Energy markets volatile amid uncertainty
Brent crude, the international oil benchmark, surged 4.1% to $105.50 per barrel in Asian trading before retreating slightly. Prices have seesawed since the conflict's onset, with Brent rebounding above $100 after the April 8 ceasefire.
Major energy firms have capitalized on the turmoil. Saudi Aramco reported a 25% year-over-year jump in first-quarter earnings on Sunday, crediting its cross-country pipeline for mitigating shipping disruptions. BP and Shell also posted significant profit increases, with BP's earnings more than doubling and Shell's rising sharply.
"Our pipeline has proven to be a critical supply artery," said Aramco CEO Amin Nasser.
Outlook remains uncertain
Analysts warn that prolonged tensions could further strain global energy supplies, particularly if the Strait of Hormuz remains closed. The next round of diplomatic efforts will be closely watched as markets brace for potential escalation.
