Trump Rejects Iran Truce as Oil Prices Spike

President Donald Trump rejected a seven-day ceasefire proposal from Iran intended to reopen the Strait of Hormuz and resume nuclear talks in exchange for the lifting of a U.S. naval blockade and the release of frozen assets. Trump characterized the offer as unacceptable, stating that Iran has overplayed its hand, though he indicated that negotiations could resume. He further refused to rule out additional military strikes on Iran following the November midterm elections.

The diplomatic impasse triggered a sharp rise in global energy markets, with Brent crude climbing above $108 per barrel. This surge fueled inflation fears, pushing U.S. 10-year Treasury yields to 19-year highs above 5.27%. In response to the economic pressure, the Reserve Bank of Australia raised its key interest rate to 4.6%. European gas prices also rose as the European Commission warned of a potential winter crisis due to restricted LNG flows through the strait.

While U.S. Central Command reported that oil volumes through the strait reached a six-month high of 10 to 11 million barrels per day, Iranian officials maintained that any permanent reopening remains contingent on their conditions. Simultaneously, Saudi-led coalition forces intercepted Houthi drones and missiles targeting Riyadh and other Saudi cities. To mitigate disruptions, Saudi Arabia restored flow through its East-West pipeline to bypass the strait, contributing to a regional export peak of 12.8 million barrels per day in September.