Oil rebounds after Trump rejects Iran peace deal - Reuters

Oil heads higher as US-Iran peace talks in stalemate | Reuters

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Oil heads higher as US-Iran peace talks in stalemate

By Florence Tan

September 27, 20266:13 PM EDTUpdated 1 hour ago

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!Oil tanker Al Shaffiah sails at the sea near the Omani coast, as seen from Musandam

An oil tanker sails at the sea near the Omani coast, as seen from Musandam, Oman, June 26, 2026. REUTERS/Stringer/File Photo Purchase Licensing Rights, opens new tab

* Summary

* Trump rejects peace deal from Iran but expect more talks this week
* Yemen's Saudi-led coalition intercept missiles, drones launch by Houthis
* Mideast crude exports rebound in September as ​Hormuz flows rise

SINGAPORE, Sept 28 (Reuters) - Oil prices rebounded more than 1% on ‌Monday after US President Donald Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz, keeping tensions in the Middle East elevated.

Brent crude futures rose $1.32, or 1.27%, to $105.64 a barrel by ​0036 GMT while US West Texas Intermediate crude was at $93.11 a barrel, up 70 ​cents, or 0.76%.

The Reuters Power Up newsletter by columnist Ron Bousso provides everything you need to know about the global energy industry. Sign up here.

Iran announced a peace proposal last week at the UN ⁠General Assembly in New York, saying it had been transmitted to the Americans via Qatari ​mediators. Trump said on Saturday he rejected the plan, but told Axios in a phone ​interview on Sunday that he expected US negotiators to engage in more talks this week.

"Geopolitical risks remain elevated, as the Houthis and Iran continued their attacks on Saudi Arabia, leaving regional supply flows vulnerable," ANZ ​analysts said in a note.

Yemen's Saudi-led coalition said early on Saturday it had intercepted two ballistic ​missiles and two drones launched by the Iran-backed Houthis towards the kingdom.

Brent edged up 0.4% last week but ‌WTI ⁠lost 7.9% on concerns that the US may ban diesel exports to ease record prices which could curb US refining output.

"Refined oil products remain a pressure point, with record US diesel prices intensifying inflation risks and prompting renewed debate over potential export curbs," ANZ analysts said.

Any restriction ​on US diesel exports ​would tighten supply outside ⁠the US, with European prices reacting to the prospect of reduced American supply, they added.

Meanwhile, crude oil exports from key Middle East producers rebounded ​in September to 12.8 million barrels per day, the highest since ​the war ⁠started in February, preliminary data from Kpler showed on Monday, as Saudi Arabia and the United Arab Emirates boosted exports.

The rebound came following a recovery in shipments via the Strait of Hormuz, ⁠which were ​set to hit about 7.4 million bpd this month, ​the data showed, as Saudi Arabia diverted exports from the Red Sea port of Yanbu to its eastern Ras ​Tanura port following attacks that damaged its East-West pipeline.

Adds details, updates prices

Reporting by Florence Tan; editing by Lincoln Feast.

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