Oil Rebounds After Trump Rejects Iran Hormuz Deal, Expects New Talks

Oil prices rebounded after President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz, Reuters reported. The rebound shows that energy traders still price in the risk that the waterway stays closed, and that a negotiated reopening is not close.

Trump has not shut the door on diplomacy. The president said he expects new Iran talks despite turning down the Hormuz offer, The Times of Israel reported. According to that report, Trump said Tehran “overplayed their hand” by attaching new conditions to a truce. Iran insists it “will not back down” from its demands.

Two positions, no overlap yet

The public record now shows two sides, each saying the other must move first.

• Washington’s position: Trump says Iran added conditions that made the offer unacceptable. That matches what U.S. officials said a day earlier. As we reported Sunday, Washington objected to Iran’s terms and to their sequencing.
• Tehran’s position: Iranian officials say they will not drop their demands. The Times of Israel report does not list which demands Iran is holding to.

Both sides can say they are open to talks and still hold positions that leave little room for a deal. Trump’s statement that he expects talks is an expectation, not a confirmed schedule. The reporting we have seen does not name a venue, a date or mediators for a new round.

Why the oil market reacts

The Strait of Hormuz is the main route for Gulf crude and liquefied natural gas exports, so headlines about its status move prices quickly. A rebound after a rejected deal is consistent with traders removing some of the premium they had priced in for a reopening. The Reuters headline does not say how far prices moved, and the full report was not available to us when this article was written. We are not citing specific price levels.

The strait is also central to the U.S. sanctions strategy. Treasury’s coalition effort, covered in our analysis of Operation Economic Outcast, rests on keeping economic pressure on Tehran while the two sides argue over terms. If the waterway stays contested, energy prices remain a live variable for that campaign and for consumers.

An unverified IRGC claim

Separately, a spokesperson for Iran’s Islamic Revolutionary Guard Corps, Brigadier General Hossein Mohebbi, claimed that Iran captured a second American submarine in what he called Hormuz’s “hunting ground,” The Jerusalem Post reported. “It’s not just a hunt; it’s an intelligence windfall,” Mohebbi said, according to the report.

The report attributes the claim to the IRGC. We have not seen independent confirmation of it, and the reporting we reviewed does not include a U.S. response. Iranian military claims about the strait are propaganda as well as information. Readers should treat this one as an assertion by one party until the Pentagon or another independent source addresses it. The wording “second” suggests an earlier claim of the same kind, but we do not have details of that earlier claim from the sources reviewed here.

Regional pressure points

The Hormuz dispute is unfolding alongside other security stories. North Korea’s latest weapons demonstrations, covered in our reporting on the drone and missile swarm tests, are competing for Washington’s attention. The Russia-Ukraine war also continues to draw American resources. Officials have not said whether those demands are shaping the administration’s Iran timeline.

What to watch

• Confirmation of talks. Any statement from Tehran or an intermediary that a new round has been scheduled would be the first concrete sign of movement.
• The content of Iran’s demands. Public detail on what Tehran is refusing to drop would show how far apart the sides are.
• Shipping activity. Movement of commercial vessels through the strait would show whether any informal reopening is under way.
• U.S. response to the IRGC claim. A Pentagon statement would either confirm or dispute the submarine assertion.
• Oil price direction. Continued gains would suggest traders expect a prolonged standoff.

This article is based on published reports by Reuters, The Times of Israel and The Jerusalem Post. Where the reporting is incomplete, we have said so. Attributed claims from Iranian officials have not been independently verified.