Oil prices surged more than 4% on Monday after President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz, reversing part of last week's decline. West Texas Intermediate crude climbed 4.39% to $96.46 per barrel, while Brent rose 4.16% to $108.66, as of 7:05 a.m. ET. Friday's settlement had WTI at $92.41 and Brent at $104.32, with Brent touching its highest level since September 15 in early trading.
Trump rejects Iran's seven-day plan
Iran had proposed a plan, reportedly conveyed through Qatari mediators, that would reopen the strait and end hostilities within seven days. Trump told reporters on Saturday, "I reject their proposal... I rejected their deal," adding that Iran wants to open the strait "immediately because they're losing so badly." Tehran has not softened its conditions; Foreign Minister Abbas Araghchi reiterated that requirements such as lifting the US naval blockade and oil sanctions are longstanding, and Washington would need to make concessions.
Trump indicated talks could resume this week, but a US official said Friday that "the United States is in a very strong position with control of the Strait of Hormuz, so we are not in a rush." The Wall Street Journal reported Saturday, citing unnamed officials, that Trump told aides he expects US strikes on Iran to resume after the November midterm elections.
Exports recovering but still below normal
Crude exports from key Middle East producers rose to 12.8 million barrels per day in September, the highest since the war began in February, according to Kpler data. That remains about 6 million barrels per day below February's 18.8 million. Exports through the Strait of Hormuz were on track for about 7.4 million barrels per day this month. Saudi Arabia shifted loadings from Yanbu to Ras Tanura after attacks damaged its East-West pipeline; the Kpler figures exclude vessels that crossed with transponders off.
Attacks continue in the region. The Saudi-led coalition reported intercepting Houthi drones heading toward Riyadh and a missile aimed at Khamis Mushait. Alerts also sounded around Abha and Jazan, where Aramco facilities are located.
Diesel export ban adds a second driver
Speaking to reporters at the UN General Assembly on Tuesday, Trump said he had asked aides to examine keeping more diesel in the US. "I've said let's not send out the diesel. We make a lot of diesel," Trump said. Treasury Secretary Scott Bessent, standing beside Trump, said the administration was assessing whether an export ban was "feasible in terms of the overall refining capacity" and whether "a full or partial ban would work."
US diesel prices averaged about $6.50 a gallon last week, a record, and US diesel exports hit a weekly record near 2 million barrels a day last month. The idea weighed on US crude last week.
This article is for informational purposes only and does not constitute financial advice.
