Oil prices have surged significantly following President Donald Trump’s declaration that Iran’s response to US proposals aimed at ending the ongoing conflict was “totally unacceptable.”
Iran’s Proposal and International Response
Tehran conveyed its response through Pakistan, which has been mediating between the two nations. According to Iran’s semi-official Tasnim news agency, Iran called for an immediate cessation of hostilities and guarantees against further US-Israeli attacks on Iranian territory.
In response to Tehran’s terms, Trump posted on social media, stating: “I have just read the response from Iran’s so-called ‘Representatives.’ I don’t like it – TOTALLY UNACCEPTABLE.”
Earlier, Washington’s terms, as reported by US news outlet Axios, had included the restoration of free transit through the Strait of Hormuz and the suspension of Iranian nuclear enrichment activities. Israeli Prime Minister Benjamin Netanyahu also asserted that the conflict with Iran would not conclude until its enriched uranium stockpiles were “taken out.”
A ceasefire, initially announced in early April to facilitate peace talks, has largely been observed despite occasional exchanges of fire. On April 21, Trump extended this truce indefinitely, providing Iran more time to present a “unified proposal.”
Market Impact and Global Supply Disruptions
The international oil benchmark, Brent crude, rose by 4.1% to $105.50 a barrel in Asian trading. Simultaneously, US-traded crude saw an increase of 4.4% to $99.80.
The critical Strait of Hormuz waterway has been effectively closed since shortly after the conflict began on February 28. This closure has severely disrupted global supplies of oil and gas, leading to significant volatility in energy prices.
The Strategic Importance of the Strait of Hormuz
The Strait of Hormuz is a narrow stretch of water situated between Iran, the United Arab Emirates (UAE), and Oman. At its tightest point, it is approximately 21 miles (33 km) wide, connecting the Persian Gulf to the Gulf of Oman, making it a vital global shipping route.
Historically, about 20% of the world’s oil and liquefied natural gas typically passes through the Strait of Hormuz. This includes oil not only from Iran but also from Gulf states such as Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE. In 2025, an estimated 20 million barrels of oil per day transited through this waterway, representing nearly $600 billion (£447 billion) worth of energy trade annually, according to the US Energy Information Administration (EIA).
However, sea traffic has been significantly reduced since the war commenced. The Strait of Hormuz, through which about a fifth of global oil and gas shipments usually pass, has been effectively shut after Tehran reportedly threatened to attack vessels attempting to cross it in retaliation against US-Israeli strikes.
Energy Company Profits Soar
Energy prices have experienced wild fluctuations since the start of the conflict, with Brent crude rising back above $100 a barrel since the ceasefire took effect on April 8.
Major energy companies have reported substantial profit jumps as oil and gas prices have soared on global markets. On Sunday, Aramco announced that its earnings had increased by more than 25% in the first three months of the year compared to the same period in 2025. Amin Nasser, Aramco’s CEO, highlighted that the Saudi Arabian energy giant’s cross-country pipeline has “proven itself to be a critical supply artery,” helping to mitigate shipping disruptions caused by the Iran conflict.
Last month, BP reported that its profits for the first three months of the year had more than doubled, while Shell also announced a significant jump in its earnings last week.
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