Brent crude jumped more than 2% on Monday after President Donald Trump rejected Iran’s latest peace proposal, pushing oil back toward levels seen during the sharpest phase of this month’s Middle East supply shock.
Brent reached $106.92 a barrel, while WTI climbed to $94.49, according to Reuters. Trump rejected Tehran’s proposal to end the conflict and reopen the Strait of Hormuz, although further U.S.-Iran talks are expected this week.
Middle East Exports Are Recovering
Crude exports from major Middle Eastern producers rebounded to about 12.8 million barrels per day in September, their highest level since the conflict began in February, according to preliminary Kpler data cited by Reuters.
Shipments through Hormuz are also expected to recover as Saudi Arabia and the UAE increase exports. Improving Gulf supply had recently helped push Brent lower after oil broke above $100.
Yet Brent is back above $106.
Why Oil Remains Elevated
| Market Factor | What It Means for Oil |
|---|---|
| Middle East exports recovering | More physical supply |
| Iran deal rejected | Geopolitical risk remains high |
| Hormuz remains vulnerable | Disruption risk persists |
| Oil market still tight | Prices remain sensitive to shocks |
The Market Is Pricing Future Disruption
Traders are not pricing only today’s export volumes. They are pricing the risk that those flows could be disrupted again.
The oil market remains tight enough that renewed problems around Hormuz or regional infrastructure could quickly create another shortage.
Saudi Arabia is also exposed after attacks highlighted the vulnerability of infrastructure designed to bypass Hormuz, including a key alternative export route.
Refined fuels remain tight as well. European diesel margins recently hit record levels even as crude supply improved, reinforcing the broader disconnect between recovering oil flows and still-elevated energy prices.
Diplomacy Is the Main Swing Factor
The market is therefore pricing a fragile recovery, not a return to normal.
More barrels are moving, but Hormuz remains vulnerable and the U.S.-Iran conflict is unresolved.
If this week’s talks produce a credible path toward reopening the strait more fully, some of the risk premium could unwind.
If diplomacy fails again, Brent above $106 may reflect a market preparing for a longer period of tight supply and geopolitical disruption.
