Global oil prices climbed on Monday after US President Donald Trump rejected Iran’s proposal for a seven-day truce aimed at ending hostilities and reopening the strategic Strait of Hormuz.
Brent crude rose above $106 a barrel, reversing a decline recorded after Iran presented its proposal at the United Nations General Assembly. The US benchmark West Texas Intermediate also gained more than 1%.
The Strait of Hormuz remains central to the dispute because of its importance to global energy shipments. Iran has linked any reopening of the waterway to conditions including the release of frozen Iranian assets, removal of sanctions on its oil exports and an end to the US naval blockade.
Trump rejected Tehran’s proposal but indicated that negotiations could resume, leaving markets focused on whether indirect talks between Washington and Tehran can make progress.
The renewed rise in crude prices has also revived concerns about inflation, particularly as higher energy and transport costs can feed into prices for goods and services.
For oil-importing economies, prolonged elevated crude prices could increase fuel and production costs. For major oil producers such as Nigeria, however, higher export prices could provide stronger foreign-exchange and government revenue, depending on production levels and other market conditions.
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