Trump Rejects Iran Peace Offer, Oil Prices Surge on Geopolitical Risk

Crude oil prices surged on Monday after US President Donald Trump rejected Iran's latest proposal to end hostilities and reopen the Strait of Hormuz, despite recent improvements in physical oil flows from the Middle East.

Brent futures climbed 2.5% to settle at $106.92 a barrel, while West Texas Intermediate advanced 2.3% to $94.49. The rejection of Tehran's overture dashed hopes for a rapid de-escalation that had helped pull prices back from the sharpest spike of this month's Middle East supply shock.

Hamad Hussain, senior economist at Capital Economics, said that while increased flows through the Strait of Hormuz have partially eased upward pressure on prices, 'the broader picture is that the oil market remains in a supply deficit.'