Hormuz standoff drives oil higher as US-Iran peace hopes ebb

Donald Trump dismissed Iran’s latest ceasefire proposal as 'garbage' and warned the 7 April truce is 'on life support' after Tehran rejected US demands to end the conflict. Iran insisted on ending the war on all fronts, including Lebanon, where Israel fights Iran-backed Hezbollah, while also demanding compensation for war damage and an end to the US naval blockade over the Strait of Hormuz. Trump, visiting China this week, will urge President Xi Jinping to pressure Iran into negotiations, though Beijing has criticized the US blockade as harmful to global interests. The standoff pushed Brent crude oil futures to over $107 a barrel, as the Strait of Hormuz—critical for 20% of the world’s oil and gas shipments—remains largely closed. The US Central Command reported redirecting 65 commercial vessels and disabling four, while the Pentagon updated the war’s cost to $29 billion, up from $25 billion last month. Rising fuel prices have also fueled US inflation, with consumer prices climbing for a second straight month in April. Trump faces domestic backlash, as polls show two-thirds of Americans—including Republicans—believe he has not clearly explained the war’s purpose ahead of November elections. Meanwhile, the US imposed new sanctions on individuals and firms aiding Iran’s oil shipments to China, aiming to cut off funding for Tehran’s military and nuclear programs. Pakistan’s foreign minister, Ishaq Dar, discussed mediation efforts with China’s Wang Yi, though Iranian officials have shown no signs of backing down. The conflict has strained global energy markets, with the US deploying the aircraft carrier Abraham Lincoln to enforce the blockade. Iran’s Fars news agency cited Deputy Political Director Mohammad Akbarzadeh reaffirming Tehran’s stance, signaling no immediate compromise. The deadlock risks prolonging the crisis, with economic and geopolitical repercussions extending beyond the Middle East.