Crude oil prices rose in early trading on Monday after US President Donald Trump rejected Iran’s proposal to end the conflict and reopen the Strait of Hormuz, renewing concerns over the security of a critical route for global oil shipments.
As at the time of writing, 5:44 am (WAT), Brent crude stood at $106.90 a barrel, up 2.46 per cent, while WTI crude was trading at $94.02 a barrel, up 1.74 per cent,
The move reverses part of Friday’s sharp decline, when oil prices fell as markets weighed the prospect of diplomatic progress between Washington and Tehran against continuing threats to energy infrastructure in the Gulf.
Trump rejected Iran’s latest proposal on Saturday, saying the terms were not acceptable. Tehran had proposed reopening the Strait of Hormuz within seven days as part of a broader arrangement to end hostilities and resume negotiations with the United States.
The development has returned the focus of the oil market to the immediate supply risk around the waterway. The Strait of Hormuz is one of the world’s most important oil transit routes, with roughly one-fifth to one-quarter of global oil supplies normally passing through it. Disruption to traffic through the strait has already affected regional oil flows and contributed to elevated crude prices.
Brent crude had risen more than 2 per cent in early Monday trading after Trump rejected the Iranian peace proposal. The move reflected renewed concerns that uncertainty around the strait and the wider Middle East conflict could persist.
Iran’s proposal had offered a potential route towards restoring normal maritime traffic through the strait within seven days, subject to US concessions including easing military pressure and lifting the blockade on Iranian ports. Tehran had previously said it was prepared to reopen the waterway if the necessary conditions were met.
For the oil market, the immediate issue is whether the diplomatic impasse translates into a prolonged disruption of crude and petroleum-product movements through the Gulf. Any sustained restriction on shipping would tighten the effective global supply balance and keep regional replacement costs elevated.
For Nigeria, sustained strength in international crude prices would have implications across the downstream value chain, particularly for the replacement cost of imported refined products and the economics of domestic refining. The direction of crude prices will therefore remain an important variable for depot pricing and petroleum-product market conditions in the coming days.