NEW YORK (Realist English). On September 27, US President Donald Trump unequivocally rejected the “seven-day ceasefire plan” conveyed by Iran through Qatari mediators, stating: “I reject their deal,” and claiming that the US “fully controls the Strait of Hormuz.” This statement quickly reversed the oil price decline that had begun on Friday: during Asian trading on Monday, Brent rose 1.8% to $106.19 per barrel, WTI — 1.0% to $93.34.
Iran’s Plan
Iranian Foreign Minister Abbas Araghchi, on the sidelines of the UN General Assembly, disclosed the contents of the plan: within seven days, the US must fulfill a series of conditions — cease hostile actions on all fronts (including Lebanon), lift the naval blockade of Iranian ports, unfreeze frozen Iranian assets, and lift sanctions on Iranian oil. In exchange, on the seventh day Iran would reopen the Strait of Hormuz and launch broader negotiations that could include the nuclear issue.
Araghchi stated: “If the American side is sincerely intent on reaching an agreement and reopening the strait, everything is already ready.”
Trump’s Response
Trump posted on Truth Social a map of the Strait of Hormuz labeled “Trump Strait.” He told journalists that Iran “wants to make a deal and immediately open the strait because it is suffering such a serious defeat,” but “this deal does not satisfy me.”
According to The Wall Street Journal, citing US officials, Trump privately told aides that he expects the resumption of bombing after the midterm elections in November. However, in a subsequent interview with Axios, Trump stated that he still expects US negotiators to participate in additional discussions this week.
Market Reaction
Along with rising oil prices, global bond yields increased. According to Bloomberg, the average yield on global bonds last week exceeded 4% — for the first time since 2007. After trading resumed, Seoul’s stock index fell more than 2%, with declines simultaneously occurring in Tokyo, Shanghai, Manila, Bangkok, and Jakarta.
Stephen Innes of Quintex Intel commented: “Oil rose, Asian stocks weakened, and the brief respite in the global fixed-income market on Friday suddenly looks more like an intermission in the middle of the play rather than its ending.”
Contradictory Signals on Supply
Despite the diplomatic deadlock pushing oil higher, some signs of improvement have appeared on the supply side. Preliminary Kpler data show that crude oil exports from major Middle Eastern producing countries recovered to 12.8 million barrels per day in September — the highest since the war began in February. Saudi Arabia and the UAE increased export volumes. Traffic through the Strait of Hormuz this month is projected to reach about 7.4 million barrels per day.
However, ongoing Houthi attacks on Saudi Arabia continue to pose a risk. The Saudi-led coalition stated on September 26 that it intercepted two ballistic missiles and two drones.
The Diesel Problem
Pressure in the refined products market persists. ANZ analysts note: “Refined products remain a point of tension; record diesel prices in the US are intensifying inflation risks and rekindling debate about possible export restrictions.” Any restrictions on US diesel exports would tighten supply outside the US, and European prices would react to the prospect of reduced American supplies.
Assessment
Trump’s rejection makes a short-term diplomatic settlement of the US-Iranian conflict unlikely, and the geopolitical premium in oil prices is rising again. However, the recovery in Middle Eastern exports and increased traffic through the Strait of Hormuz partially mitigate the supply shock. The market’s focus will shift to whether US negotiators actually return to the negotiating table this week, and whether Trump fulfills his threat to resume bombing after the midterm elections. Until the situation clarifies, Brent is expected to fluctuate in the $100–110 range, and inflationary pressure will continue to transmit to global bond markets and central bank policy expectations.
