Trump Eases Stance on Iran Sanctions Amid Strait of Hormuz Tensions

Oil prices gained on Monday after US President Donald Trump said he had rejected an Iranian proposal to reopen the Strait of Hormuz. However, gains were pared as reports emerged that Trump was ready to ease sanctions on Iran and release its frozen assets in exchange for concrete progress on the country's nuclear program.

Trump reportedly made these comments on Saturday after no diplomatic breakthrough between the US and Iran at the UN General Assembly in New York. The event saw fiery speeches by Trump and his Iranian counterpart, Masoud Pezeshkian.

Tehran said it had conveyed a new proposal to the US which would allow the Strait of Hormuz to reopen within seven days while broader negotiations resume, provided Washington lifts its naval blockade, eases military pressure, removes sanctions on Iranian oil sales, and agrees to a ceasefire. Trump rejected this deal, saying 'they want to make a deal, and I think that's fine. I like making a deal too. But that deal would not be acceptable.'

Despite the uncertainty, traders were encouraged by reports that Saudi Arabia had resumed exporting oil via its East-West Pipeline after repairing damage caused by Houthi drone strikes. This pipeline provides an alternate route for crude instead of transiting the Strait of Hormuz.