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Riyadh, September 28, 2026 – Global oil markets surged on Monday, with Brent crude climbing back above $105 per barrel after diplomatic efforts between Washington and Tehran faltered.
The rebound underscores how geopolitical tensions continue to dominate energy pricing, even as supply fundamentals show signs of stabilization.
Brent crude settled at $105.64, up 1.27 percent, while U.S. West Texas Intermediate rose to $93.11, gaining 0.76 percent.
Traders attributed the rally to President Donald Trump’s rejection of Iran’s peace proposal, which sought to reopen the Strait of Hormuz under a Intermediate plan presented at the United Nations General Assembly.
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The U.S. stance dashed hopes of easing one of the world’s most critical energy chokepoints, reinforcing fears of prolonged instability in the Gulf.
The Strait of Hormuz, through which nearly a fifth of global oil flows, remains vulnerable.
Saudi Arabia reported intercepting missiles and drones launched by Iran-backed Houthi rebels, highlighting persistent threats to infrastructure.
In response, Riyadh shifted crude shipments from Yanbu to Ras Tanura, helping restore flows to about 7.4 million barrels per day.
Regional exports overall rose to 12.8 million barrels per day in September, the highest since the war began in February, suggesting producers are working to offset disruptions.
Yet the geopolitical premium remains steep.
Analysts warn that any escalation could push prices higher, particularly if negotiations collapse entirely.
Trump signaled that talks may resume later this week, but markets remain skeptical.
“The rejection of Iran’s plan keeps the risk premium alive,” said one energy strategist. “Until there’s clarity, volatility will dominate.”
Beyond the Middle East, U.S. policy is adding fresh uncertainty.
Record diesel prices at home have prompted speculation that Washington may restrict exports to shield domestic consumers.
Such a move would ripple across Europe, where refiners rely heavily on American supply.
Traders fear that curbs could tighten global refined product markets, amplifying inflationary pressures already weighing on economies.
For investors, the rebound reflects more than supply demand mechanics.
It is a reminder that oil remains hostage to geopolitics, with diplomacy and conflict shaping price trajectories as much as production data.
The coming days will test whether Washington and Tehran can find common ground or whether markets must brace for another round of turbulence.
At $105, crude is once again signaling that energy security is inseparable from political risk.
For policymakers, the challenge is balancing domestic priorities with global stability.
For traders, the message is clear in oil markets, peace talks matter as much as pipelines.
