Oil price surges higher on setback to hopes for U.S.-Iran peace deal

Global oil prices jumped overnight following U.S. President Donald Trump’s rejection of Iran’s counteroffer to a 14-point U.S. proposal aimed at ending the conflict. Trump called the Iranian response 'totally unacceptable,' citing demands for an end to U.S. sanctions, the naval blockade of Iranian ports, and guarantees against future attacks by the U.S. and Israel. The market reacted sharply, with Brent crude rising over 4% to $105.50 per barrel and West Texas Intermediate climbing to $99.80, though prices later retreated slightly in European trading. The U.S. peace plan reportedly included Iran’s surrender of its 440-kilogram stockpile of highly enriched uranium, a 20-year freeze on nuclear enrichment, and the dismantling of nuclear facilities. Analysts warn that continued supply disruptions could mirror the economic strain seen during the COVID-19 pandemic, with demand destruction estimated at 9 million barrels per day. Susannah Streeter of the Wealth Club noted that constrained supplies will force consumers, companies, and countries to adapt, while Felipe Elink Schuurman of Sparta Commodities predicted poorer nations will face humanitarian crises and richer countries will bear higher costs. Trump’s criticism came via a post on Truth Social, where he described Iran’s demands as unreasonable and separate from the broader U.S. proposal. The conflict has now entered its 11th week, with no immediate resolution in sight. Experts suggest that while a major escalation remains unlikely, the humanitarian and economic fallout from prolonged supply constraints will disproportionately affect vulnerable populations globally. The oil price surge underscores the fragility of the current market, where disruptions in supply chains and geopolitical tensions continue to drive volatility. Analysts caution that without a breakthrough in negotiations, prices could remain elevated, exacerbating economic pressures in regions already struggling with inflation and energy costs. The situation reflects broader concerns about the stability of global energy markets amid ongoing conflicts and political uncertainties.