Key Takeaways

• Crude surges: Brent oil futures climbed 4.2% to $105.55 per barrel, while WTI advanced 4.8% to $100.00.
• Wild reversal: Both contracts had crashed more than 6% last week on peace deal optimism.
• Trump’s bombshell: The president rejected Tehran’s counterproposal as “totally unacceptable,” dashing hopes for near-term de-escalation.
• U.S. demands: Washington’s proposal reportedly sought a 20-year halt to Iran’s uranium enrichment, removal of stockpiles, and dismantling of nuclear facilities.
• Iran’s counteroffer: Tehran demanded sanctions relief, end of U.S. naval presence around Hormuz, security guarantees, and recognition of its right to some nuclear activity.
• Uranium dilution proposal: The WSJ reports Iran offered to dilute some highly enriched uranium and transfer the rest to a third country.
• Hormuz still shut: The strategic strait remains largely closed since the conflict began.
• Trump-Xi summit: Trump will visit China between May 13-15 for talks with President Xi Jinping.
• China’s leverage: ING analysts see a “glimmer of hope” that Trump-Xi talks could move Iran closer to a peace deal.
• China’s oil imports plunge: April crude imports fell 20% year-on-year to the lowest level since July 2022.
• Market sensitive to noise: “Oil prices remain highly sensitive to noise around Iran,” ING noted.

Oil prices jumped nearly 5% during Asian trading on Monday after U.S. President Donald Trump called Iran’s response to a U.S. peace proposal “totally unacceptable,” keeping geopolitical risks firmly elevated.

As of 01:37 ET (5:37 GMT), Brent oil futures climbed 4.2% to $105.55 a barrel, while U.S. West Texas Intermediate crude futures advanced 4.8% to $100.00 per barrel.

Both contracts had declined more than 6% last week on optimism that Washington and Tehran were nearing a temporary agreement to stabilize Gulf shipping routes.

Trump Rejects Iran’s Response to Peace Proposal

Trump on Sunday rejected Tehran’s latest counterproposal to Washington’s peace framework, saying the Iranian response was “totally unacceptable.” The comments dampened expectations for a near-term easing of tensions in the Gulf region.

The original U.S. proposal reportedly sought a 20-year halt to Iran’s uranium enrichment activities, the removal of highly enriched uranium stockpiles, and the dismantling of key nuclear facilities — in exchange for sanctions relief and an end to military action.

Iran’s response, delivered through Pakistani mediators, reportedly demanded the lifting of sanctions, an end to the U.S. naval presence around the Strait of Hormuz, security guarantees, and recognition of Iran’s right to continue some nuclear activity.

The Wall Street Journal reported that Iran proposed diluting some of its highly enriched uranium and transferring the remainder to a third country.

Investors remain focused on the Strait of Hormuz, which has remained largely shut since the start of the conflict.

Trump-Xi Meeting Could Help Iran Peace Deal — Analysts

Beijing on Monday confirmed that Trump would visit China this week between May 13 and 15 and hold talks with Chinese President Xi Jinping.

The summit is likely to focus on trade, Taiwan, and the Iran conflict, with Beijing seen as a key diplomatic player given its economic ties with Tehran.

Meanwhile, the latest trade data from China for April showed crude oil imports falling 20% year-on-year to the lowest level since July 2022.