Oil moves higher after Trump rejects Iran’s peace plan

Brent crude’s price has surpassed $105/bbl after US President Donald Trump rejected Iran’s response to a US-drafted ceasefire proposal.

IMAGE: Getty Images

The rise in oil prices comes after Trump posted on social media platform Truth Social that Tehran’s response to the US proposal was “totally unacceptable,” without revealing any details of Iran’s reply.

Tehran’s proposal, which was submitted yesterday, sought an immediate halt to the conflict across all fronts, recognition of Iran’s authority over the Strait of Hormuz, and the lifting of the US blockade on Iranian exports, the Financial Times reported.

“The oil market remains heavily headline-driven, with prices surging after President Trump rejected Iran’s latest peace plan proposal,” two analysts from ING Bank noted.

Several US allies in the Gulf region – including the UAE, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia – have said that any arrangement involving Iranian control over the Strait, or the imposition of transit fees, will be unacceptable, The Wall Street Journal reported.

Meanwhile, US navy has continued to strike vessels trying to evade Washington’s blockade, the US Central Command (CENTCOM) said.

On Friday, US forces struck two Iranian-flagged oil tankers – M/T Sea Star III and M/T Sevda – in the Gulf of Oman, increasing pressure on Tehran’s shipping network. Last week, the US Navy disabled a third Iranian-flagged vessel, M/T Hasna, CENTCOM said. “All three vessels are no longer transiting to Iran,” it added.

Notably, dark fleet activity in the Persian Gulf has surged nearly 600% between 19 April and 3 May, with Iran’s Kharg Island continuing covert VLCC loading operations throughout the reporting period, maritime intelligence firm Windward reported.

“One month after the ceasefire, maritime visibility across Hormuz remains severely degraded,” Windward said.

Oil market analysts are increasingly focused on upside risks that could drive Brent’s price to fresh record highs, should peace negotiations collapse entirely.

“One would expect the market to become increasingly fatigued by the deluge of headlines and the back-and-forth,” ING Bank analysts said.

By Aparupa Mazumder

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