Trump Rejects Iran's Peace Response as Oil Climbs and Hormuz Stays Largely Shut

On Sunday, Iranian state television began laying out Tehran's answer to an American peace proposal, and within hours President Donald Trump had written his own verdict on Truth Social: "I don't like it — TOTALLY UNACCEPTABLE." He gave no further detail. By Monday, oil prices had risen nearly 3%, reflecting a market that now expects a 10-week-old war to continue and the Strait of Hormuz to stay largely shut.

The American offer, floated a few days earlier, was meant to reopen negotiations. It proposed ending the fighting first and only then turning to harder questions, including Iran's nuclear programme. Iran's reply went in a different direction. According to state TV, it centered on ending the war on all fronts, especially Lebanon, where Israel, a U.S. ally, is fighting the Iran-backed Hezbollah. It also demanded compensation for war damage and stressed Iranian sovereignty over the Strait of Hormuz.

The semi-official Tasnim news agency listed more of what Tehran wants: an end to the U.S. naval blockade, a guarantee against further attacks, the lifting of sanctions, and an end to the American ban on Iranian oil sales. On Monday, Foreign Ministry spokesperson Esmaeil Baghaei defended the package. He called the demands legitimate, citing the blockade, which he described as piracy, and Iranian assets frozen in banks under U.S. pressure. He added that safe passage through Hormuz and security in the region and in Lebanon were also part of what Tehran considers a "generous and responsible" offer.

The strait is the pressure point. Before the war began on February 28, it carried a fifth of the world's oil and liquefied natural gas. Traffic is now a trickle. Data from Kpler and LSEG showed three crude-laden tankers left the waterway 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.

Political pressure is building in Washington. Surveys show the war is unpopular with American voters, who face sharply higher gasoline prices less than six months before national elections that will decide whether Trump's Republican Party keeps control of Congress. Abroad, support is thin: NATO allies have refused calls to send ships to open the strait without a full peace deal and an internationally mandated mission.

The rhetoric from the main players suggests little give. Asked whether combat operations were over, Trump said in remarks aired Sunday, "They are defeated, but that doesn't mean they're done." Israeli Prime Minister Benjamin Netanyahu told CBS's "60 Minutes" that the war was not finished, citing "more work to be done": removing enriched uranium from Iran, dismantling enrichment sites, and addressing Iran's proxies and ballistic missiles. Diplomacy was the best route for the uranium, he said, but he did not rule out force. Iranian President Masoud Pezeshkian posted that Iran would "never bow down to the enemy."

The regional fallout continued over the weekend. 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, Israel and Hezbollah are still clashing despite a U.S.-brokered ceasefire announced April 16.

What comes next is unclear. Trump is expected in Beijing on Wednesday, where Iran is on the agenda with President Xi Jinping. Washington wants China to lean on Tehran toward a deal. Baghaei suggested Beijing might use the occasion instead to warn of the consequences of what he called illegal and bullying U.S. actions.