Trump Rejects Iran's Peace Reply as Oil Jumps and Hormuz Stays Largely Closed

On Sunday, Iran released its answer to an American offer that had been floated days earlier in hopes of reopening negotiations. Within hours, President Donald Trump rejected it. "I don't like it — TOTALLY UNACCEPTABLE," he wrote on Truth Social, and he gave no further detail. On Monday, oil prices jumped by more than 3.5%.

The U.S. proposal had been to stop the fighting first and only then begin talks on harder questions, including Iran's nuclear programme. Iran's reply, as described by state television, centered on ending the war on all fronts, with particular attention to Lebanon, where Israel, a U.S. ally, is fighting the Iran-backed militant group Hezbollah. It also demanded compensation for war damage and stressed Iranian sovereignty over the Strait of Hormuz. The semi-official Tasnim news agency added further demands: that the U.S. end its naval blockade, guarantee no more attacks, lift sanctions and drop its ban on Iranian oil sales.

On Monday, Tehran defended its position. Foreign Ministry spokesperson Esmaeil Baghaei called the demands legitimate, citing an end to the war, an end to the blockade, which he described as piracy, and the release of Iranian assets frozen in banks under U.S. pressure. He also listed safe passage through the Strait of Hormuz and security in the region and in Lebanon, and he called the whole package a generous and responsible offer. President Masoud Pezeshkian posted that Iran would never bow down to the enemy and would defend national interests with strength.

The war is ten weeks old. It began on February 28, and since then the Strait of Hormuz has become one of its central pressure points. Before the fighting, the narrow waterway carried about one-fifth of the world's oil and liquefied natural gas. Traffic now is a trickle. Shipping data from Kpler and LSEG showed three laden crude tankers left the strait last week, with their trackers switched off to avoid Iranian attack. A ceasefire that took effect in early April has paused all-out warfare, but sporadic flare-ups around the strait have tested it.

The Gulf remains tense. On Sunday the United Arab Emirates said it intercepted two drones from Iran. Qatar condemned a drone attack that hit a cargo ship in its waters, one that had come from Abu Dhabi. Kuwait said its air defences dealt with hostile drones that entered its airspace. In southern Lebanon, clashes between Israel and Hezbollah have continued despite a U.S.-brokered ceasefire announced on April 16. The source gives no casualty figures.

Asked in remarks aired Sunday whether combat operations against Iran were over, Trump said: "They are defeated, but that doesn't mean they're done." Israeli Prime Minister Benjamin Netanyahu, on CBS News' "60 Minutes," said the war was not over, citing "more work to be done": removing enriched uranium from Iran, dismantling enrichment sites, and addressing Iran's proxies and ballistic missiles. Diplomacy would be the best route to the uranium, he said, but he did not rule out force. He also said an end to hostilities with Iran would not automatically end the war in Lebanon, and that Israeli planners had underestimated Iran's ability to choke off Hormuz traffic. "It took a while for them to understand how big that risk is, which they understand now," he said.

Domestic and international pressure is building. Surveys show the war is unpopular with U.S. voters, who face sharply higher gasoline prices less than six months before nationwide elections that will decide whether Republicans keep control of Congress. Abroad, NATO allies have refused calls to send ships to open the strait without a full peace deal and an internationally mandated mission.

It is unclear what diplomatic or military steps come next. Trump is expected in Beijing on Wednesday, where Iran is among the topics he and Chinese President Xi Jinping are set to discuss. Trump has been pressing China to use its influence to push Tehran toward a deal.