Trump rejects Iran proposal as Hormuz tensions drive oil prices higher

DUBAI/WASHINGTON — U.S. President Donald Trump on Monday rejected Iran’s response to a U.S.-backed peace proposal, deepening uncertainty over the fragile ceasefire and raising fears of renewed disruption in the Strait of Hormuz.

The rejection came just hours after Tehran released a response to Washington’s proposal aimed at reopening negotiations and easing tensions in the region. Iran’s response focused on ending the war across multiple fronts, including the ongoing conflict in Lebanon involving Israel and the Iran-backed militant group Hezbollah.

Iran also demanded compensation for war-related damages, reaffirmed its sovereignty over the Strait of Hormuz, and called on the United States to end its naval blockade, lift sanctions, guarantee no further attacks, and remove restrictions on Iranian oil exports.

In a post on Truth Social, Trump dismissed Tehran’s proposal without elaborating.

“I don’t like it. Totally unacceptable,” Trump wrote.

The U.S. proposal had reportedly sought an immediate halt to hostilities before discussions on more contentious issues, including Iran’s nuclear program.

Iran defended its position on Monday, with Foreign Ministry spokesperson Esmaeil Baghaei describing the country’s demands as legitimate.

“Our demand is legitimate: demanding an end to the war, lifting the U.S. blockade and releasing Iranian assets that have been unjustly frozen,” Baghaei said, adding that Iran’s proposals regarding navigation and regional security were “a generous and responsible offer.”

Oil markets reacted sharply to the diplomatic deadlock. Global oil prices jumped by as much as $4 per barrel before easing slightly later in the day, as concerns mounted over the continued disruption of shipping through the Strait of Hormuz.

Before the conflict erupted on Feb. 28, the strategic waterway handled roughly one-fifth of the world’s oil and liquefied natural gas shipments. Shipping activity has since slowed dramatically, with only a handful of crude tankers reportedly passing through the strait in recent days.

Shipping trackers Kpler and LSEG reported that several oil tankers exited the waterway last week with tracking systems turned off to reduce the risk of attack.

Although a ceasefire implemented in early April halted full-scale warfare, sporadic clashes near the strait have continued to threaten regional stability.

In the United States, rising fuel prices have increased political pressure on the Trump administration ahead of nationwide elections later this year. Polls indicate that the conflict remains unpopular among American voters.

Washington has also faced difficulties securing broader international backing for efforts to reopen the waterway. Several NATO allies have reportedly declined to deploy naval forces without a comprehensive peace agreement and an internationally sanctioned mission.

Turkey’s Foreign Minister Hakan Fidan is expected to visit Qatar on Tuesday for talks focused on the conflict and maritime security in the Gulf, according to a Turkish diplomatic source.

Trump is also scheduled to travel to Beijing on Wednesday, where Iran is expected to be among the key issues discussed with Chinese President Xi Jinping amid growing international concern over the conflict’s impact on global energy markets.

Trump has urged China to use its influence to pressure Tehran into reaching an agreement with Washington. However, Baghaei suggested Beijing could instead challenge U.S. policies in the region.

“Our Chinese friends know very well how to warn about the consequences of U.S. actions on regional peace and security,” Baghaei said.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said the conflict was not yet over, citing unresolved concerns over Iran’s uranium enrichment, missile capabilities, and regional proxy groups.

In an interview with CBS News’ “60 Minutes,” Netanyahu said diplomacy remained the preferred path but did not rule out further military action.

Iranian President Masoud Pezeshkian said Tehran would continue defending its national interests and would “never bow down to the enemy.”

Regional tensions also remained high over the weekend. The United Arab Emirates reported intercepting two drones allegedly launched from Iran, while Qatar condemned a drone strike on a cargo vessel in its waters. Kuwait said its air defense systems intercepted hostile drones entering its airspace.

Clashes between Israeli forces and Hezbollah militants have also continued in southern Lebanon despite a U.S.-brokered ceasefire announced in April.