Oil rises more than 2% as US-Iran peace talks falter (September 28, 2026)

Oil prices rose more than 2% on Monday after US President Donald Trump rejected an Iranian peace proposal aimed at ending the conflict and reopening the Strait of Hormuz, renewing concerns about global energy supplies despite signs of improved oil flows from the Middle East during September.

Brent crude futures rose by about 2.49%, or $2.60, to $106.92 a barrel , while U.S. West Texas Intermediate crude climbed 2.25% to $94.49 . The gains followed Trump’s rejection of the Iranian peace proposal, which Tehran said it had conveyed to the U.S. through Qatari mediation, during the United Nations General Assembly meetings in New York.

Although Trump indicated he expected negotiations to resume during the week, the lack of a clear agreement on ending the war and reopening the Strait of Hormuz kept the geopolitical risk premium present in oil prices.

The Strait of Hormuz is a pivotal point in oil market developments, as any disruption to shipping through it threatens supply flows from the Gulf region to global markets.

But preliminary data from Kpler showed that crude oil exports from major Middle Eastern producers rose during September to 12.8 million barrels per day , the highest level since the outbreak of war in February.

This recovery came as shipments through the Strait of Hormuz improved, with expected volumes reaching around 7.4 million barrels per day during the month, along with increased exports from Saudi Arabia and the UAE.

Despite improved oil flows in September, analysts believe the market remains in deficit, limiting the impact of increased exports on prices. Hamad Hussain, senior climate and commodities economist at Capital Economics, explained that improved oil flows through the Strait of Hormuz are easing some upward pressure, but the broader picture still points to a market deficit.

This means that any further decline in supplies or further setbacks in negotiations could push prices back up, especially given the ongoing security risks in the region.

Houthi attacks add to geopolitical risks. Oil market developments coincided with the announcement by the Saudi-led coalition in Yemen that it had intercepted two ballistic missiles and two drones launched by the Iranian-backed Houthis towards the kingdom, at a time when regional tensions remain high.

These developments add an element of uncertainty to energy security in the Middle East, as markets continue to monitor for any threats that could affect oil infrastructure or shipping routes.

Meanwhile, markets are watching the possibility of the United States imposing restrictions on diesel exports in an attempt to curb record-high domestic prices. West Texas Intermediate crude lost more than 7% last week amid concerns that a diesel export ban would curtail US refining activity. In Europe, the premium for low-sulfur gasoil over Brent futures hit a record high of nearly $95 a barrel last week, as the global diesel supply shortage intensified.

Goldman Sachs warned that any further shock to diesel supplies could quickly spread to other regions, including Asia, if Europe and Latin America move to increase their purchases of available supplies in global markets.

Oil prices are currently moving under the influence of two opposing factors. On the one hand, improved shipping flows and increased exports from Saudi Arabia and the UAE have helped alleviate some pressure on supply. On the other hand, stalled negotiations, supply security risks, and market deficits continue to support prices. In the coming days, investors will be closely monitoring the progress of US-Iranian talks, shipping traffic through the Strait of Hormuz, and any developments regarding US diesel exports, given their direct impact on the global energy market balance.