Oil Prices Rise as Trump Rejects Iran Truce Offer, Reviving Inflation Concerns

• Oil prices climbed sharply on September 28, 2026, after President Donald Trump rejected Iran’s latest proposal to end the conflict and reopen the Strait of Hormuz. Brent crude rose 3.29% to US$107.75 per barrel, while WTI increased 2.32% to US$94.55 per barrel in early trading, reflecting renewed concerns over global energy supply.
• Prices later pared most of those gains as expectations grew that Qatari mediators would hold further talks with the US and Iran. Brent ultimately settled 0.9% higher at US$105.28 per barrel, while WTI gained 0.2% to US$92.60 per barrel.
• Iran’s proposal was presented at the UN General Assembly and transmitted to the US through Qatari mediators. Trump rejected the plan but said he expected US negotiators to continue talks this week, suggesting that diplomatic efforts have not ended.
• The renewed rise in oil prices added to inflation concerns and upward pressure on Treasury yields, as investors assessed whether higher energy costs could require the Federal Reserve (Fed) to maintain a tighter policy stance. The Fed raised rates by 25 basis points earlier this month, while policymakers have signalled that further increases may be needed if inflation remains elevated.
• Markets are therefore increasingly sensitive to developments in the US-Iran conflict, particularly any changes in oil flows through the Strait of Hormuz. The waterway handled around one-fifth of global oil and liquefied natural gas supplies before the conflict, making its reopening an important factor for the global energy outlook.
• The sharp early rise in oil prices, followed by a partial reversal as prospects for further talks improved, highlights how sensitive energy markets remain to developments in the US-Iran conflict. A prolonged disruption to Hormuz flows could keep energy prices and inflation elevated, increasing pressure on central banks to maintain tighter monetary policy.

(Source: Reuters)