Donald Trump has rejected Iran’s response to a U.S. proposal aimed at ending the ongoing conflict, a move that has quickly intensified tensions between Washington and Tehran.
The rejection triggered an immediate rise in global oil prices and renewed fears of disruption in the Strait of Hormuz, a key route for global oil shipments. Analysts warn that further escalation could worsen the energy crisis.
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Talks Collapse After Iran’s Response
Hope had grown that the 10 week conflict could end. However, Iran’s reply on May 10, 2026, changed the situation. The response introduced several conditions, including issues linked to Lebanon, where Israel continues fighting Hezbollah.
Iran demanded compensation for damage caused during the conflict. It also called for recognition of its sovereignty over the Strait of Hormuz, an end to naval blockades, a guarantee against future attacks, and the lifting of sanctions on oil and trade.
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Washington Rejects Iran’s Conditions
The proposal was dismissed in Washington within hours. President Donald Trump responded on social media with a brief rejection, saying: “I don’t accept it. Absolutely intolerable.”
Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, defended the position. He said Iran’s demands were legitimate. He listed ending the war, lifting restrictions on shipping, releasing frozen assets, and ensuring safe passage through Hormuz as key conditions.
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Oil Markets React Sharply
The diplomatic breakdown pushed global oil markets higher. Prices rose by 4% on May 11, 2026, reaching $105.50 per barrel. Markets reacted to fears of supply disruption through the Strait of Hormuz.
The same market has seen sharp swings in recent weeks. On April 30, 2026, crude prices jumped by 7% to over $126, the highest level since the start of the Russia–Ukraine war in 2022. Earlier, on May 6, prices dropped to $97 after reports suggested progress in ceasefire talks between Washington and Tehran.
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Uncertain Outlook
The situation remains uncertain as negotiations stall. Markets continue to react strongly to every signal from both sides, with the Strait of Hormuz remaining a major point of concern for global energy stability.
