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Trump Rejects Iran Peace Offer, Cease-Fire Near Collapse as Oil Hits $104

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President Donald Trump said Monday the month‑old cease-fire with Iran was “on life support” after he rejected Tehran’s written response to a U.S. peace proposal, a move that pushed Brent crude above $104 a barrel and reignited fears of renewed Gulf clashes pbs +1. The 10‑week conflict has already disrupted about 1 billion barrels of oil flows and left the Strait of Hormuz effectively semi‑closed to normal shipping theguardian.

Trump, speaking in the Oval Office, called Iran’s response “a piece of garbage” and “totally unacceptable,” saying the truce was “unbelievably weak” and had “about a 1% chance” of surviving bbc +1. Iran, which routed its reply through Pakistani mediators, insisted its demands were “legitimate rights,” including lifting U.S. sanctions, ending the naval blockade, reopening Hormuz and halting hostilities “on all fronts,” including Lebanon axios +1.

What Trump’s Rejection Means for the Cease-Fire and the Gulf

The cease-fire, announced in early April and unilaterally extended by Trump on April 21, was already strained by exchanges of fire in the Strait of Hormuz, U.S. strikes on Iran‑flagged tankers and reported Iranian attacks on U.S. and Emirati targets pbs +1. By publicly dismissing Tehran’s counterproposal, Trump signaled Washington is prepared to keep military options on the table, including fresh naval escorts and operations to reopen the waterway reuters.

Tehran’s insistence on a comprehensive halt to fighting, reparations and security guarantees clashed directly with U.S. and Israeli demands that Iran first curb or dismantle elements of its nuclear program and roll back regional influence, particularly through Hezbollah in Lebanon axios +1. Israel’s Prime Minister Benjamin Netanyahu has argued that “there’s still enrichment sites that have to be dismantled,” underscoring Jerusalem’s push to keep pressure on Iran even if Washington seeks a deal aljazeera. The gulf between those positions left mediators such as Pakistan, Qatar and China with little immediate room to broker a compromise.

Oil Markets, Global Economy and Domestic Political Risks

Oil prices jumped nearly 3% on Monday, with Brent settling at $104.21 a barrel and U.S. WTI at $98.07, as traders priced in the prospect of a prolonged disruption to shipping through Hormuz and the possibility of renewed U.S.-Iran strikes theguardian. An estimated 1 billion barrels of oil have been “lost” over the past two months due to conflict‑related disruptions, while OPEC output fell in April to about 20.04 million barrels per day, down roughly 830,000 bpd month‑on‑month theguardian.

Despite the energy shock, U.S. stock indexes hovered near record highs, though fuel‑sensitive sectors such as airlines and retailers lagged and 10‑year Treasury yields edged up to around 4.40% nbcnews. At home, Trump faced mounting unease over the economic toll: a late‑April poll found about 60% of Americans believed the Iran war increased the risk of recession, and more than 40% said higher gas prices had forced changes in household spending washingtonpost. Analysts noted the standoff complicated Trump’s political balancing act between escalating to secure a tougher deal and curbing a conflict that is driving up costs for voters ahead of future elections washingtonpost +1.

The Bigger Picture

With the cease-fire badly frayed, both Washington and Tehran appeared locked into maximalist positions—U.S. officials demanding tighter constraints on Iran’s nuclear and regional activities, and Iranian leaders insisting on sanctions relief, security guarantees and an end to hostilities beyond the Gulf axios +1. Trump’s planned trip to Beijing this week, where he is expected to press President Xi Jinping to use China’s leverage as a major oil buyer and potential arms supplier to Iran, underscored how any path away from renewed war is likely to run through third‑party capitals as much as through Washington and Tehran pbs +1. For now, the risk calculus is shifting in markets and chancelleries alike: absent a sudden diplomatic breakthrough, the world faces the prospect of a longer, costlier confrontation centered on the Strait of Hormuz.

pbs Reuters; bbc CNBC; axios Al Jazeera; theguardian Reuters energy; aljazeera BBC; thehill Washington Post; nbcnews AP; washingtonpost Washington Post poll; wionews Time.