Trump Rejects Iran's Peace Proposal, Oil Prices Surge Amid Strait of Hormuz Standoff

US President Donald Trump rejected Iran's response to a US peace proposal, causing oil prices to surge over $4 a barrel. The 10-week-old conflict continues to paralyze shipping through the Strait of Hormuz, a critical waterway for one-fifth of global oil and LNG flows.

Iran's proposal focused on ending the war, especially in Lebanon, and demanded compensation for war damage, Iranian sovereignty over the Strait of Hormuz, an end to the US naval blockade, guaranteed cessation of attacks, lifted sanctions, and an end to the US ban on Iranian oil sales. Trump dismissed the proposal on Truth Social, stating, «I don’t like it — TOTALLY UNACCEPTABLE.» The US had initially proposed ending hostilities before discussing contentious issues like Iran's nuclear program.

The ongoing stalemate has led to increased geopolitical tensions, with NATO allies refusing to send ships to open the Strait of Hormuz without a full peace deal. US voters are also facing higher gasoline prices ahead of nationwide elections. Trump is expected to discuss Iran with Chinese President Xi Jinping in Beijing, seeking China's influence to push Tehran towards a deal. Israeli Prime Minister Benjamin Netanyahu stated the war is not over, citing the need to remove enriched uranium from Iran and address its proxies and ballistic missile capabilities, preferring diplomacy but not ruling out force. Iranian President Masoud Pezeshkian vowed to defend national interests.

Recent days have seen renewed fighting, with the UAE intercepting two drones from Iran, Qatar condemning a drone attack on a cargo ship, and Kuwait dealing with hostile drones. Clashes also persist in southern Lebanon between Israel and Hezbollah, despite a US-brokered ceasefire. Netanyahu acknowledged that Israeli planners underestimated Iran's ability to disrupt traffic through the Strait of Hormuz.