Global oil markets experienced a significant shock on Monday after President Donald Trump dismissed Iran’s latest response to peace negotiations as "totally unacceptable." The President`s direct rejection has dashed hopes for a near-term diplomatic breakthrough, sending energy prices soaring as traders react to the prospect of prolonged instability in the Middle East. International benchmark Brent crude jumped 4.1% to $105.50 a barrel in Asian trade, while West Texas Intermediate crude rose by 4.59% to hover near $99.80.
The diplomatic impasse centers on a response sent by Tehran via Pakistan, which has been serving as the primary mediator between the warring parties. According to Iran’s semi-official Tasnim news agency, the Iranian leadership submitted its terms to the White House following weeks of behind-the-scenes discussions. However, President Trump signaled his disapproval on Truth Social, stating that he found the terms offered by Iran’s "so-called representatives" to be entirely unsatisfactory. This hardline stance suggests that the military and economic blockade of Iran will continue for the foreseeable future.
The conflict, which erupted on February 28, 2026, has already led to the effective closure of the Strait of Hormuz. This strategic waterway is responsible for the transit of approximately one-fifth of the world’s daily oil and gas supply. Since the start of the war, energy markets have been in a state of high volatility, as the closure of the strait has severely disrupted global logistics. While a ceasefire has been mostly observed since early April to allow for negotiations, the underlying tensions remain unresolved, and the threat of resumed military action continues to loom.
In Washington, officials have emphasized their own framework for ending the war, which was reported by Axios to include the total suspension of Iranian nuclear enrichment. The U.S. also demands the immediate restoration of free navigation through the Strait of Hormuz. Israeli Prime Minister Benjamin Netanyahu added to the pressure by stating that the war would not conclude until Iran’s enriched uranium stockpiles were completely neutralized. The refusal of Iran to meet these core demands has left the diplomatic track in a state of precarious limbo.
Despite the broader economic strain caused by the conflict, major energy firms continue to report record earnings. Saudi Aramco announced on Sunday that its first-quarter revenue for 2026 jumped by more than 25% compared to the same period in 2025. Aramco CEO Amin Nasser noted that the company’s cross-country pipeline has become a critical supply artery, allowing exports to bypass the blocked strait. Other energy giants like BP and Shell have similarly reported surging profits as oil prices remain consistently above the $100 mark since the April ceasefire began.
