Oil prices increased in Asian trading on Monday Morning after US President Donald Trump said Iran’s response to a US peace plan to end the war was not acceptable.
Iran reportedly sent its answer through Pakistan, which has been acting as a middleman during discussions between the two sides. According to Iran’s Tasnim news agency, Tehran demanded an immediate end to the conflict and guarantees that no more attacks would be carried out by the United States or Israel.
Following the news, global oil prices rose sharply. Brent crude climbed nearly 4% to more than $105 a barrel. US crude oil also gained around 4%, reaching close to $100 a barrel. Markets reacted strongly because traders fear the conflict could continue and further damage energy supplies.
One of the biggest concerns is the Strait of Hormuz. Since the war began on 28 February, this important waterway has remained mostly closed. Around one fifth of the world’s oil and gas normally passes through this route. Iran had warned that ships attempting to cross could face attacks in response to US and Israeli military strikes.
Responding to Iran’s terms, Trump posted on social media that he had reviewed Tehran’s reply to the U.S. proposal and strongly rejected it, saying:“I have just read the response from Iran’s so-called “representatives”.’ I don’t like it – TOTALLY UNACCEPTABLE.”
Reports said Washington’s peace conditions included reopening the Strait of Hormuz and stopping Iran’s uranium enrichment activities. Israeli Prime Minister Benjamin Netanyahu also stated that the conflict would not end until Iran’s enriched uranium stockpiles were removed.
Although a ceasefire was announced in April to allow negotiations, tensions have continued. Small clashes and exchanges of fire have still been reported. Later, Trump extended the truce to allow Iran more time to provide a final proposal.
Energy markets have remained unstable throughout the conflict. Oil prices have moved up and down rapidly as investors watch developments in the Middle East closely. Large energy companies have also benefited from higher prices. Saudi oil giant Aramco recently reported a major increase in profits during the first months of the year. The company said its pipeline network helped reduce the impact of shipping disruptions caused by the war.
