Oil Prices Surge Above $106 as Trump Rejects Iran’s Truce Offer, Stocks Mixed

Global oil prices climbed on Monday as US President Donald Trump rejected Iran’s proposal for a seven-day truce, reigniting inflation concerns and putting financial markets on edge.

The rejection came after Tehran presented a proposal at the United Nations General Assembly last week calling for a halt in hostilities and the reopening of the Strait of Hormuz, a critical global energy shipping route.

The waterway has become a focal point of the conflict between the United States and Iran, with disruptions to shipping contributing to a severe supply crisis and higher energy costs worldwide. The situation has also been complicated by the Houthis’ control of Yemen’s Red Sea coast, including the strategically important Bab al-Mandab Strait.

Speaking to reporters outside the White House, Trump said he rejected Iran’s proposal. However, in an interview with Axios, he indicated that negotiations could resume, saying Iran wanted a deal but that its offer did not meet his expectations.

According to reports, indirect talks between Washington and Tehran could take place as early as Monday. Iran has maintained conditions for reopening the Strait of Hormuz, including the release of frozen assets, the lifting of sanctions on its oil and an end to the US naval blockade.

Oil prices, which fell by more than two per cent on Friday following news of Iran’s proposal, rebounded at the start of the new week. Brent crude climbed above $106 per barrel, raising concerns about renewed inflationary pressure.

Asian stock markets were mixed, with Seoul recording losses of more than two per cent as it reopened after a prolonged break. Tokyo, Shanghai, Manila, Bangkok and Jakarta also declined, while Hong Kong, Sydney, Singapore and Wellington posted gains.

Bond yields also rose, with the average yield on a global bond gauge exceeding four per cent last week for the first time since 2007, according to Bloomberg. Investors are now watching the US Federal Reserve ahead of its next policy meeting at the end of October, with market expectations pointing to the possibility of another interest rate increase.

Attention is also turning to the release of US inflation data and a key employment report this week, which could influence the Federal Reserve’s next policy decision. Market analyst Stephen Innes of Quintex Intel said renewed tensions in the Middle East had pushed oil higher and weighed on Asian equities, while investors continued to anticipate the possibility of a return to negotiations.