Trump's Rejection of Iran Proposal Fails to Spur Oil Price Surge

Oil prices have largely shrugged off the geo-political tensions surrounding the Strait of Hormuz. Despite President Trump rejecting Iran's latest proposal to reopen the strait, Brent crude rose 0.92% to $98.51 and WTI gained 1.15% to $93.51 on Monday.

The market's muted reaction is due in part to the fact that tanker traffic has been steady for weeks, despite a reduction from pre-conflict norms. Saudi Arabia's East-West pipeline also restarted on September 22 after a mid-September drone-related closure, restoring a key bypass route.

The rejection of Iran's proposal has not triggered a significant increase in the war-risk premium, as traders are treating it as a negotiating position rather than a terminal breakdown. Instead, demand-side anxiety is now driving oil prices, with US equity market breadth deteriorating and credit stress rising in AI-related names.