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Oil jumps 4% as Trump rejects Iran’s response to ceasefire proposal

Oil prices surged by 4% following former President Trump's dismissal of Iran's response to a ceasefire proposal. This development adds to ongoing tensions in the Middle East.

Oil prices rose sharply on Monday after US President Donald Trump rejected Tehran’s reply to a proposal to end the conflict in Iran, while European markets fell and Asian stocks hit record levels.

Oil prices surged in early trade, with both Brent and US crude futures gaining over 4%. This followed Trump’s dismissal of Tehran’s response to a proposal aimed at ending the war in Iran and the related blockade of the Strait of Hormuz. Details of the proposal have not been disclosed. Trump described Tehran’s response as "totally unacceptable".

By Monday morning, the front month contract for Brent crude traded near $104.75 per barrel, while US crude (WTI) rose to about $98.90. On Friday, Brent closed around $100 and WTI near $95 per barrel. As US markets opened Monday afternoon, prices eased slightly but remained above last week’s levels, with Brent at approximately $103 per barrel and WTI at $96.20.

US stock indices opened slightly higher, trading within a 0.3% range, with the Nasdaq 100 leading gains. European markets showed mixed reactions: the Euro Stoxx 50 fell over 0.75%, while the broader Stoxx 600 was up 0.25% by afternoon. The UK’s FTSE 100, Germany’s DAX 30, and Italy’s FTSE MIB each traded within a 0.3% range, but France’s CAC 40 dropped more than 1.2%.

In Asia, stock indices largely brushed off the negative developments. Tokyo’s Nikkei 225 declined 2% after briefly hitting a new intraday record high. South Korea’s Kospi reached a record intraday peak, rising 4.1% to 7,804.71, supported by technology stocks including Samsung Electronics and memory chip maker SK Hynix.

Technology and AI-related sectors have buoyed markets in Japan and South Korea despite tensions in Iran, with the Nikkei 225 and Kospi up more than 10% and 30%, respectively, over the past month.

This week, President Trump is expected to visit China for talks with President Xi Jinping, potentially marking the first US presidential visit to China since 2017. The leaders are anticipated to discuss a wide range of topics, including trade issues.

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