Oil prices rise after trump rejects Iran truce proposal

Oil prices and bond yields rose on Monday (September 28) after US President Donald Trump rejected an Iranian proposal for a seven-day truce, reviving concerns over inflation and global energy supplies.

Brent crude rose more than 1% to above $106 a barrel, while US West Texas Intermediate also gained after both benchmarks fell more than 2 per cent on Friday following news of Iran’s proposal.

Iran presented the proposal at the UN General Assembly last week, offering a halt to hostilities and the reopening of the Strait of Hormuz, a key route for global energy shipments.

Trump rejected the proposal but said he expected negotiations with Tehran to resume.

Iran has tied the reopening of the strait to conditions including the release of frozen Iranian assets, an easing of oil sanctions and an end to the US naval blockade, according to reports.

The renewed oil price surge put pressure on Asian equities, with markets in Seoul, Tokyo, Shanghai and several Southeast Asian centres falling, while some other regional markets posted gains.

Higher energy prices have also pushed bond yields higher as investors assess the potential inflationary impact and its implications for US monetary policy.

Markets are now awaiting key US economic data due this week, including the Federal Reserve’s preferred inflation gauge and a major jobs report, which could influence expectations for future interest-rate decisions.

Analysts said markets were still pricing in the possibility of renewed US-Iran negotiations despite the latest setback, leaving investors focused on whether diplomacy can ease pressure on energy supplies.