Oil prices rose more than 2% on Monday after Iran announced that it would not ease its conditions for reopening the Strait of Hormuz following U.S. President Donald Trump’s rejection of Tehran’s proposal, keeping uncertainty high over when traffic through the vital oil shipping route would return to normal.
Brent crude futures for November delivery increased 2.7% to $107.08 per barrel, while West Texas Intermediate crude futures gained 2.4% to reach $94.66 per barrel. Brent futures have risen around 18% during the month, including Monday’s gains.
The Iranian proposal included reopening the Strait of Hormuz within seven days while broader negotiations resume, provided that Washington lifts its naval blockade, reduces military pressure, removes sanctions on Iranian oil sales, and agrees to a ceasefire. Iran confirmed its commitment to these conditions despite Trump’s rejection of the proposal. However, Trump stated that he expects negotiations with Iran to resume this week, according to a report by Axios, with Qatar acting as a mediator between both sides in an attempt to revive discussions.
The Strait of Hormuz, which previously handled around one fifth of global oil and liquefied natural gas supplies before the conflict began, has witnessed a sharp decline in shipping activity. Supply concerns increased further as Iran backed Houthi forces in Yemen intensified attacks on Saudi Arabia and commercial shipping in the Red Sea. Saudi Arabia announced on Saturday that it had intercepted two ballistic missiles and two drones launched by the Houthis, days after intercepting six missiles targeting the areas of Taif and Yanbu.
The disruption has forced Gulf producers to seek alternative routes for crude exports. However, there have been signs that some oil volumes are moving through the Strait at a higher rate, with Trump stating that more than 20 million barrels passed through the waterway during the weekend, according to Axios.
Markets are also closely monitoring refined product supplies, as diesel prices in Europe and the United States reached record highs, tightening fuel markets due to disruptions in oil and product exports from the Middle East and Russia.
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