Oil prices jump 5% after US-Iran peace deal falls through
Oil prices jumped nearly 5% in Asian trading on Monday after U.S. President Donald Trump called Iran’s response to a U.S. peace proposal “totally unacceptable”, keeping geopolitical risks elevated.
As of 01:37 ET (5:37 GMT), Brent Oil Futures climbed 4.2% to $105.55 a barrel, while U.S. West Texas Intermediate crude futures advanced 4.8% to $100.00 per barrel.
Both contracts had declined more than 6% last week on optimism that Washington and Tehran were nearing a temporary agreement to stabilize Gulf shipping routes.
Trump rejects Iran’s response to peace proposal
Trump on Sunday rejected Tehran’s latest counterproposal to Washington’s peace framework, saying the Iranian response was “totally unacceptable”. The comments dampened expectations for a near-term easing of tensions in the Gulf region.
“One would expect the market to become increasingly fatigued by the deluge of headlines and the back-and-forth. However, oil prices remain highly sensitive to noise around Iran, highlighting the significance of the ongoing supply disruptions in the Persian Gulf,” ING analysts said in a note.
The original U.S. proposal reportedly sought a 20-year halt to Iran’s uranium enrichment activities, the removal of highly enriched uranium stockpiles, and the dismantling of key nuclear facilities in exchange for sanctions relief and an end to military action.
Iran’s response, delivered through Pakistani mediators, reportedly demanded the lifting of sanctions, an end to the U.S. naval presence around the Strait of Hormuz, security guarantees, and recognition of Iran’s right to continue some nuclear activity.
