Oil prices spike after Trump rejects Iran truce offer

Oil prices surged on Monday after US President Donald Trump turned down an Iranian offer of a seven-day truce, raising concerns about inflation. Iran proposed a cessation of hostilities that would reopen the Strait of Hormuz, alleviating a global energy supply crisis that has driven up costs. However, President Trump stated he rejected the proposal.

Despite the setback, he indicated negotiations may resume. Indirect talks between the US and Iran could commence as early as Monday. Iran remains committed to its conditions, including the release of frozen assets, lifting of sanctions on its oil, and an end to the US naval blockade. Oil prices, which plummeted more than two percent on Friday due to the offer, rebounded at the start of the week, with Brent crude surging over three percent above $107 a barrel.

This resurgence fueled worries about inflation and negatively impacted stock markets. Several Asian stock indices declined, while some in Hong Kong, Sydney, Singapore, and Wellington rose. London, Paris, and Frankfurt opened on the offensive. Bond yields surged, reaching four percent for the first time since 2007, ahead of the Federal Reserve's upcoming policy meeting.

Investors are also awaiting crucial inflation data and a US jobs report. Despite the tensions, some market participants believe an eventual resolution is possible.