Key Takeaways

• Prices push higher: Brent crude rose 1% to $109.34 per barrel, while WTI gained 0.9% to $97.28 — extending Monday’s 2-3% surge.
• Trump rejects Iran’s offer: Reports from the Wall Street Journal and Reuters reveal the president and his team are skeptical of Iran’s proposal to reopen Hormuz, citing its push to delay nuclear talks.
• Nuclear sticking point: Halting Iran’s uranium enrichment and preventing weapons development remain Washington’s core objectives in the conflict.
• Hormuz still shut: The strategic strait remains largely closed, with the U.S. naval blockade firmly in place and crude flows scant.
• Talks in limbo: Pakistan-brokered negotiations fell apart over the weekend, leaving future dialogue deeply uncertain.
• Bessent’s bombshell: U.S. Treasury Secretary Scott Bessent warned Iran’s oil industry will “soon collapse” under the blockade, with gasoline shortages and storage limits forcing production cuts.
• Conflict approaching 60-day mark: The U.S.-Israel war on Iran nears two months with no breakthrough, even as the indefinite ceasefire holds.
• Central bank week: Focus also shifts to BOJ and Fed meetings, where elevated oil prices may trigger warnings about energy-driven inflation.

Oil prices advanced during Asian trading on Tuesday as the deadlock between the United States and Iran showed virtually no signs of breaking.

A wave of overnight reports indicated that U.S. President Donald Trump was dissatisfied with Iran’s proposal to reopen the Strait of Hormuz, leaving the vital shipping artery largely paralyzed for the foreseeable future.

Brent crude futures climbed 1% to $109.34 per barrel, while West Texas Intermediate crude futures rose 0.9% to $97.28 per barrel as of 22:45 ET (02:45 GMT).

Both benchmarks had already rocketed between 2% and 3% higher in the previous session.

Trump Pours Cold Water on Iran’s Hormuz Proposal

Reports earlier this week revealed that Tehran had floated a fresh proposal to reopen Hormuz and bring the war to a close — an offer that was now being weighed by Washington.

However, dispatches from the Wall Street Journal and Reuters indicated that Trump and his advisers were unconvinced by the offer, primarily because it called for delaying talks over Iran’s nuclear activities.

Halting Iran’s nuclear enrichment program and blocking the development of nuclear weapons remain Washington’s two principal objectives in the ongoing conflict. The proposed postponement of nuclear discussions emerged as a key obstacle for Trump as he assessed Iran’s new offer, according to the WSJ report.

The Strait of Hormuz remains largely sealed off, while the United States continues to enforce its naval blockade of Iran. Oil flows through Hormuz have stayed at a trickle, keeping crude prices buoyed as markets remain anxious over tightening supplies.

Plans for additional Pakistan-mediated talks between the U.S. and Iran also collapsed over the weekend, leaving the future of negotiations entirely up in the air. That development triggered sharp gains in oil prices on Monday.

The U.S.-Israel campaign against Iran is approaching the 60-day milestone, with little to show by way of improved relations between Washington and Tehran.

While an indefinite ceasefire has so far held, both Washington and Tehran have largely resisted efforts to convene additional face-to-face negotiations.

Beyond the Iran war, market attention this week also turns to pivotal central bank meetings in Japan and the United States, with elevated oil prices likely to prompt fresh warnings about energy-driven inflation pressures in the months ahead.

Bessent: Iran’s Oil Industry Headed for “Collapse”

U.S. Treasury Secretary Scott Bessent declared that Iran’s oil industry was already beginning to scale back production due to the naval blockade, and that pumping operations would “soon collapse.”

In a sharply worded social media post, Bessent further warned that Iran was poised to start experiencing gasoline shortages, as the naval blockade has effectively shut down all export activity from the country.

Iran has reportedly been running out of oil storage capacity at an alarming pace due to its inability to export — a direct consequence of the naval blockade. That scenario is expected to force Tehran into progressively winding down its active oil production.