United States President Donald Trump on Monday dismissed Iran’s latest peace proposal as “totally unacceptable,” a rebuke that lifted oil prices sharply in early Asian trade and revived concerns of renewed fighting in the Middle East. Trump announced his rejection on his Truth Social platform, saying he had read Tehran’s response and found it “not acceptable,” without providing details of the Iranian offer.
Iran had responded on Sunday to the United States’ diplomatic outreach, warning that it would not hesitate to retaliate against any further U.S. strikes and would not allow additional foreign warships to navigate the Strait of Hormuz. Tehran’s statement, posted by President Masoud Pezeshkian on X, emphasized that dialogue does not equal surrender and that the country would continue to defend its interests.
The impasse sent benchmark Brent crude up 4.65 % to $99.95 a barrel and West Texas Intermediate (WTI) higher than 4 % to $105.5 a barrel, as traders priced in the risk of further disruptions to the vital shipping lane. Iran’s partial blockade of the strait, a conduit for roughly one‑fifth of the world’s oil, has already tightened market sentiment.
Israeli Prime Minister Benjamin Netanyahu, whose forces entered the war alongside the United States on 28 February, reiterated that the conflict will not end until Iran’s nuclear facilities are dismantled. Speaking on CBS’s “60 Minutes,” he said enriched uranium and enrichment sites must be removed from Iran before any peace can be considered durable.
According to state broadcaster IRIB, Tehran’s counter‑proposal, delivered to Pakistani mediators, called for an end to hostilities on all fronts – especially in Lebanon, where Israel continues to clash with Iran‑backed Hezbollah – and for guarantees of shipping security. The United States had reportedly suggested extending the Gulf truce to allow negotiations on a broader settlement, including Iran’s nuclear program.
The Wall Street Journal, citing sources familiar with the talks, reported that Iran’s draft included a provision to dilute some of its highly‑enriched uranium and transfer the remainder to a third country, with assurances that it could be returned if negotiations failed. The lack of a clear roadmap has heightened focus on the Strait of Hormuz, where Iran is reportedly establishing a toll system for vessels and restricting maritime traffic.
U.S. officials have warned that Tehran’s control of the international waterway would be “unacceptable,” given its importance to global oil supplies. The U.S. Navy has intermittently blocked Iranian ports and diverted ships, while Britain and France are preparing to lead a multinational effort to secure the strait after a ceasefire is achieved. French President Emmanuel Macron stressed that France’s role would be a security mission coordinated with Iran, not a naval deployment, after Tehran warned of a “decisive and immediate response” to any foreign warships entering the waterway.
The diplomatic lull was punctuated on Sunday by fresh drone attacks in the Gulf. The United Arab Emirates reported intercepting a drone launched from Iran, Kuwait cited “hostile drones” in its airspace, and Qatar’s defense ministry said a freighter arriving from Abu Dhabi was hit. In a statement, the Iranian parliament’s national security commission warned Washington that Iran’s restraint had ended and that any attack on Iranian vessels would provoke a strong, decisive response against American ships and bases.
Trump is expected to raise the issue with Chinese President Xi Jinping during a planned visit to Beijing on Thursday, according to a senior U.S. official. China remains a major purchaser of Iranian oil, and any shift in its stance could influence the broader diplomatic calculus.
The situation remains fluid, with oil markets highly sensitive to developments in the Gulf and the broader Middle‑East peace process. Continued escalation could further destabilise regional trade routes and impact global energy supplies, underscoring the urgency of renewed diplomatic engagement.
