Oil Prices Surge as Trump Rejects Iran Peace Proposal

On September 28, oil prices rebounded significantly, with Brent crude futures increasing by $3.98, or 3.82 percent, to $108.30 a barrel, and US West Texas Intermediate (WTI) rising by $3.52, or 3.81 percent, to $95.93 a barrel. This surge was attributed to renewed uncertainty over a diplomatic resolution to the US-Iran conflict after President Donald Trump rejected an Iranian peace proposal aimed at resolving the conflict and reopening the Strait of Hormuz, a vital route for global oil shipments.

The proposal was presented by Iran at the United Nations General Assembly in New York and communicated to the US through Qatari mediators. Despite the geopolitical tensions, preliminary data from Kpler indicated that crude exports from major Middle East producers rose to 12.8 million barrels per day in September, the highest since the conflict began in February, as Saudi Arabia and the United Arab Emirates increased shipments.

However, the broader oil market remains undersupplied, according to Hamad Hussain, a senior climate and commodities economist at Capital Economics.