Oil prices moved higher on Monday after U.S. President Donald Trump rejected a peace proposal from Iran aimed at ending the conflict and fully reopening the Strait of Hormuz. The decision kept concerns about Middle East tensions alive and supported oil prices.
Brent crude rose $1.32, or 1.27%, to $105.64 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 70 cents, or 0.76%, to reach $93.11 per barrel.
Last week, Iran announced at the United Nations General Assembly that it had presented a peace proposal to the United States through Qatari mediators. Trump said he rejected the proposal but indicated that U.S. negotiators would continue discussions later this week.
Analysts said geopolitical risks remain high as attacks linked to Iran and the Houthi movement continue to threaten energy infrastructure and regional oil supplies.
On Saturday, the Saudi-led coalition reported intercepting two ballistic missiles and two drones launched by the Iran-backed Houthis toward Saudi Arabia.
Although Brent crude posted a small gain last week, WTI fell sharply after reports that the U.S. government was considering restrictions on diesel exports to help lower record domestic fuel prices. Such a move could reduce refinery activity in the United States.
Analysts noted that diesel remains a major concern because rising fuel costs continue to increase inflation pressures. Any limits on U.S. diesel exports could also tighten supplies in international markets, particularly in Europe, which relies on shipments from the United States.
At the same time, oil exports from major Middle Eastern producers recovered in September. Preliminary shipping data showed exports rising to about 12.8 million barrels per day, the highest level since the conflict began earlier this year.
The increase was largely driven by higher exports from Saudi Arabia and the United Arab Emirates. Shipments through the Strait of Hormuz also improved, reaching around 7.4 million barrels per day this month.
Saudi Arabia helped boost exports by redirecting some shipments from its Red Sea port of Yanbu to the eastern port of Ras Tanura after attacks damaged parts of its East-West pipeline network.
Overall, the oil market remains focused on Middle East developments, as traders weigh the impact of ongoing tensions against signs of recovering export flows from the region.
