President Donald Trump rejected Iran’s seven-day truce offer on Monday, removing the fastest route to easing pressure on global oil supply. Brent crude futures rose 2.84% to $107.29 per barrel, while West Texas Intermediate climbed nearly 2% to above $94. Brent is up 18.56% over the past month and nearly 60% year-on-year.
Iran’s proposal would have reopened the Strait of Hormuz within seven days in exchange for an end to the US naval blockade, the release of frozen assets, and a halt to what Tehran calls US “acts of aggression.” Trump told reporters, “I reject their proposal,” adding that the terms were “not the deal that I want to make.” Iranian Foreign Minister Abbas Araghchi said Tehran remains “fully prepared for the war to be resumed” while still being ready for diplomacy.
The Wall Street Journal reported that Trump has told aides he expects renewed strikes on Iran after the 3 November midterm elections, though no final decision on scale has been made. The calendar is now a key variable for oil traders: a confirmed deal before the midterms could push Brent toward the mid-$90s, while resuming bombing could open a path toward $120, according to scenarios cited from Goldman Sachs and HSBC.
Broader financial markets showed inflation stress. The US 10-year Treasury yield briefly traded above 5.21%, the highest since 2007, and gold fell more than 2% to about $4,220 an ounce. With the Federal Reserve’s late-October meeting approaching, CME FedWatch put the probability of another rate hike above 65%. Higher energy costs are reinforcing inflation concerns and tightening financial conditions.
Shipping through Hormuz remains severely constrained, with flows estimated near 33.7 million barrels a week. Houthi forces backed by Iran have also intensified attacks in Yemen, while Saudi Arabia intercepted ballistic missiles and drones over the weekend. Qatar is acting as a mediator, and Trump has said indirect talks could resume as early as this week, but no formal meeting has been confirmed.
