Oil heads higher as US-Iran peace talks in stalemate

Oil prices climbed over 1% on Monday as US President Donald Trump rejected Iran's peace proposal and maintained tensions in the Middle East. Brent crude futures rose to $105.64 a barrel, while US West Texas Intermediate crude increased to $93.11 a barrel. Iran proposed a peace deal at the UN General Assembly, which was relayed to the United States via Qatari mediators.

However, Trump stated he would not accept the plan, promising more US negotiators in upcoming talks. Geopolitical risks remain elevated due to ongoing attacks from Iran-backed Houthis on Saudi Arabia, affecting regional supply flows. Oil prices have been influenced by concerns over potential US diesel export bans, which could strain refining output and intensify inflation risks.

Despite this, crude oil exports from key Middle East producers surged to 12.8 million barrels per day in September, the highest since the war began in February. This growth was attributed to increased exports via the Strait of Hormuz, as Saudi Arabia redirected shipments from the Red Sea port of Yanbu to its eastern Ras Tanura port following pipeline damage.