Hormuz Latest. Trump Rejects Iran Peace Plan; WTI Crude Hits $100 Again
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International oil prices surged, with WTI and Brent crude futures rising over 3%, as U.S. President Trump rejected Iran's peace proposal, escalating geopolitical tensions. Reports indicate Iran proposed transferring enriched uranium to a third country while refusing to dismantle nuclear facilities. Further, a drone attack on a cargo vessel near Qatar highlights ongoing shipping risks. OPEC production has also fallen to a 36-year low. While geopolitical premiums currently drive prices, a shift toward supply-demand fundamentals is anticipated long-term, though full dissipation of risk premiums is unlikely due to ongoing negotiation constraints.
Tradingkey - International oil prices surged in early Asian trading after U.S. President Trump and Iran rejected each other's latest long-term peace proposals. Both major crude oil futures rose by more than 3%, with WTI briefly hitting the $100 mark again. As of press time, WTI is still up 3.79% at $99/barrel, while Brent crude is up 3.29% at $104.62/barrel.
Trump Rejects Iran's Proposal to End the Middle East War
In terms of the latest developments, Trump expressed his dissatisfaction with Iran's response on the social media platform Truth Social, calling it "completely unacceptable."
Reports indicate that Iran recently proposed transferring a portion of its highly enriched uranium stockpile to a third country, while rejecting the idea of dismantling its nuclear facilities. According to the latest proposal, Iran would dilute some of the highly enriched uranium and send the remainder to a third country, but it demanded a guarantee that the transferred uranium must be returned if negotiations fail. Furthermore, Iran has ruled out the possibility of dismantling its nuclear facilities.
Later, however, the Iranian media outlet Tasnim stated that Iran disputed the aforementioned media reports.
On Sunday, an intense drone attack briefly set fire to a large cargo vessel in the Persian Gulf near Qatar, marking the latest shipping attack since the U.S. and Iran reached a short-term ceasefire agreement. The United Arab Emirates and Kuwait stated they intercepted several rounds of hostile drone attacks but did not disclose which military forces were behind them.
Geopolitical conflict remains the core variable for short-term crude oil prices.
On the supply side, OPEC crude production fell by 420,000 barrels per day (bpd) in April to 20.55 million bpd, a 36-year low. Kuwait saw a daily reduction of 470,000 barrels, while Iran's output fell by 180,000 barrels. Although OPEC+ has signaled plans to boost production and stabilize supply, actual output remains low. Combined with navigation risks in the Strait of Hormuz, short-term oil prices are primarily driven by geopolitical premiums and shipping safety expectations.
From a medium-to-long-term perspective, the pricing logic for international oil may transition from being "dominated by geopolitical war premiums" back toward "supply and demand fundamentals." While the price pivot is expected to soften from previous highs, a move into a unilateral downward channel appears unlikely.
If the interim U.S.-Iran agreement is successfully implemented and crude oil transit through the Strait of Hormuz normalizes, the geopolitical risk premium in oil prices will continue to compress, creating room for further price retreats. However, transit rights, nuclear material disposal, and compensation demands remain core negotiating constraints, meaning the geopolitical risk premium is unlikely to fully dissipate.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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