Oil prices climbed about two per cent on Monday after U.S. President Donald Trump rejected an Iranian proposal aimed at ending the conflict and reopening the Strait of Hormuz, keeping concerns over global energy supplies in focus.
Brent crude futures rose $2.28, or 2.2 per cent, to $106.60 a barrel by 10:27 a.m. EDT, putting the international benchmark on track for its highest close since September 15. U.S. West Texas Intermediate crude gained $1.70, or 1.8 per cent, to $94.11 a barrel.
Iran maintained over the weekend that diplomacy remained the only solution to its conflict with the United States and Israel. Trump said he had rejected Tehran’s proposal to reopen the Strait of Hormuz and end the fighting, although he indicated that negotiations could continue.
Trump told Axios on Sunday that he expected U.S. negotiators to participate in further talks this week. Qatari mediators are expected to hold separate discussions with Iranian Foreign Minister Abbas Araqchi in New York and U.S. officials on Monday or Tuesday, according to an official briefed on the negotiations.
The discussions are expected to centre on a revised version of a seven-day proposal Iran presented last week on the sidelines of the United Nations General Assembly.
Saudi Foreign Minister Prince Faisal bin Farhan also arrived in Washington on Monday for talks with U.S. Secretary of State Marco Rubio as tensions continued between Saudi Arabia and Yemen’s Iran-backed Houthi movement.
Middle East oil exports rebound
Despite continuing geopolitical tensions, crude exports from major Middle Eastern producers increased in September.
Preliminary data from Kpler showed exports reaching 12.8 million barrels per day, their highest level since the conflict began in February, as Saudi Arabia and the United Arab Emirates increased shipments.
Oil flows through the Strait of Hormuz were expected to reach about 7.4 million barrels per day in September. Saudi Arabia has redirected some exports from the Red Sea port of Yanbu to Ras Tanura on its eastern coast after attacks damaged the kingdom’s East-West pipeline.
However, shipments through Hormuz remain below levels recorded before the conflict, leaving global supplies constrained.
Before the United States and Israel attacked Iran in February, approximately 20 million barrels of oil per day — around one-fifth of global supply — passed through the Strait of Hormuz.
Saudi Aramco is also considering offering discounts on official selling prices for crude loaded off Oman to help buyers offset record shipping costs, according to people familiar with the matter.
With diplomatic negotiations continuing and the Strait of Hormuz operating below pre-conflict levels, developments in the Middle East remain a major driver of global oil prices.
