Trump's Rejection Sends Energy Stocks Soaring on Higher Oil Prices

Crude oil prices surged on Monday after President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz. As a result, stocks related to the energy sector, such as Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), and the Energy Select Sector SPDR Fund (NYSEARCA:XLE), showed gains in pre-market trading.

The move was triggered by Trump's rejection of Tehran's proposal to reopen the waterway within seven days in exchange for lifting a U.S. naval blockade and easing oil sanctions. International benchmark Brent crude climbed over 3% to reach $107 a barrel, according to Reuters.

This development is expected to expand cash-flow projections for upstream producers, but policy risks may complicate the downstream outlook. While drillers benefit directly from higher commodity realizations, refiners face headwinds due to Trump's consideration of a ban on diesel exports to lower domestic fuel costs.