Oil prices rallied on Monday morning after U.S. President Donald Trump rejected Iran’s response to a U.S. peace proposal, “I don’t like it – totally unacceptable,” Trump said in a Truth Social post, quashing hopes for an imminent resolution to the Middle East conflict that kicked off in late February. Brent crude for July delivery was up 1.% to trade at $103.3 per barrel at 9.48 am ET while WTI crude for June delivery gained 1.04% to trade at $96.41/bbl.
Last week, the White House offered a one-page, 14-point memorandum focused on an immediate end to fighting and reopening the Strait of Hormuz, while deferring more complex issues like Iran’s nuclear program for later talks. Tehran’s response, delivered via Pakistani mediators, included demands for recognition of Iranian sovereignty over the Strait of Hormuz; payment of war reparations for damage caused during the conflict; lifting of all U.S. sanctions and an end to the naval blockade of Iranian ports as well as the release of frozen Iranian assets. Tehran has defended its stance,”Our demand is legitimate: demanding an end to the war, lifting the (U.S.) blockade and piracy, and releasing Iranian assets that have been unjustly frozen in banks due to U.S. pressure,” Foreign Ministry spokesperson Esmaeil Baghaei said.
Trump’s rejection of Tehran’s demands increases the risk of a return to a full-blown war. “They are defeated, but that doesn’t mean they’re done,” Trump told reporters on Monday, suggesting a potential return to kinetic action. He emphasized that the U.S. continues to monitor Iran’s enriched uranium stockpiles via Space Force surveillance and warned of further strikes if a real end to the nuclear issue is not reached.
Despite a U.S.-brokered ceasefire in Lebanon, clashes between Israel and Hezbollah have persisted. Israeli Prime Minister Benjamin Netanyahu has maintained that the war is not over until Iran’s nuclear enrichment sites are dismantled. When questioned on how to achieve this, Netanyahu responded, “You go in, and you take it out,” hinting at potential direct physical intervention in his 60 Minutes interview.
By Alex Kimani for Oilprice.com
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