Trump Rejects Iran Peace Proposal, Brent Crude Soars Past $106
Brent crude futures rose to around $106 to $107 a barrel on Monday, reversing most of Friday's fall. The rally came after US President Trump rejected Iran's peace proposal over the weekend, despite earlier signals that he might be open to further talks.
The Strait of Hormuz remains a major concern for oil traders, as any disruption could undo the recent recovery in crude exports from key Middle Eastern producers. Data shows that shipments through the strait are expected to rise to about 7.4 million barrels per day, but attacks involving Iran and the Houthis continue to pose a risk.
The rejection of the peace proposal by Trump has left traders unsure what comes next, with every hint of a deal pulling oil lower and every setback sending it back up. The conflict began in February, and a quick resolution now looks less likely, according to reports that Trump expects US strikes on Iran to resume after the November midterm elections.
The impact is being felt in India, where imports account for the bulk of crude consumption. A Brent price above $100 will inflate the import bill and put pressure on the rupee, which fell about 20-25 paise to around 96 against the dollar on Monday. The rupee's weakness makes oil costlier in rupee terms, potentially feeding into fuel, transport, and input costs.