Oil prices climbed sharply on Monday following President Donald Trump’s blunt dismissal of Iran’s counter-proposals for ending the conflict in the Middle East.
Labeling Tehran’s response “totally unacceptable,” Trump’s stance has heightened fears of prolonged instability and potential supply disruptions through the critical Strait of Hormuz.
Brent North Sea Crude jumped 3.1% to reach $98.39 a barrel, while West Texas Intermediate rose 3.2% to $104.55, as analysts warned that a persistent “geopolitical risk premium” is now firmly baked into the market.
In response, Iranian foreign ministry spokesman, Esmaeil Baqaei, maintained that Tehran’s demands—which include an end to the U.S. naval blockade and the release of frozen assets—were merely a pursuit of “legitimate rights.”
However, the immediate rejection from the White House suggests a deepening diplomatic deadlock. Lloyd Chan of MUFG noted that the swift dismissal underscores a “wide gulf” between the two nations, pointing toward continued regional volatility rather than the rapid de-escalation investors had hoped for.
Global equity markets reacted with a mixed performance as the geopolitical tension overshadowed other economic news.
While Seoul’s markets surged 4.3% on the back of tech gains, Tokyo’s Nikkei closed 0.5% lower, weighed down by a nearly 10% plunge in Nintendo shares following a weak profit forecast and price hikes for the Switch 2.
In Europe, major indices in Frankfurt and Paris opened in the red, while London’s FTSE 100 managed to eke out marginal early gains amidst the uncertainty.
The diplomatic focus now shifts to China, where President Trump and Treasury Secretary Scott Bessent are scheduled for a high-stakes summit with President Xi Jinping.
While China’s foreign ministry expressed a willingness to work with the U.S. to “inject more stability” into a volatile world, the Middle East conflict is expected to dominate the agenda.
As the U.S. delegation moves through Asia, the dollar strengthened slightly against the yen, reflecting a cautious atmosphere as the world watches for the next move in this high-stakes standoff.
