Oil prices surge after Trump rejects Iran’s plan to reopen Strait of Hormuz

Oil prices have risen sharply following United States President Donald Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz within seven days.

Brent crude, the international benchmark, rose more than 3 percent on Monday, nearing $108 a barrel during trading in Asia.

After easing in the afternoon, Brent futures for November were trading at $107.35 a barrel shortly before 08:00 GMT.

Major stock markets in the Asia Pacific had a mixed session after Wall Street ended the week on a high on Friday with a 0.5 percent gain for the benchmark S&P 500.

Japan and South Korea’s benchmark Nikkei 225 and Kospi indexes fell 0.73 percent and 2.70 percent, respectively.

Hong Kong’s Hang Seng Index rose 0.54 percent, while the S&P/ASX 200 in Australia edged up 0.17 percent.

The latest market volatility comes after Trump said on Saturday Tehran’s latest proposal for ending the US-Israel war on Iran was not acceptable.

Under Tehran’s proposal announced at the United Nations General Assembly on Friday, the US would release frozen Iranian funds, lift sanctions and end its naval blockade on Iranian ports in exchange for Iran reopening the strait and returning to negotiations on its nuclear programme within a week.

Before the US and Israel launched strikes on Iran in late February, approximately one-fifth of global oil supplies flowed through the Strait of Hormuz, which links the Gulf to the Gulf of Oman and the Arabian Sea.

Commercial shipping in the waterway has declined drastically since the start of the war amid a slew of attacks on vessels in the Gulf, most of which have been blamed on Iran or allied groups.

Vessels made 132 transits of the strait from September 21 to 27, a rise from 116 the previous week, according to maritime intelligence platform MarineTraffic.

Before the start of the war, the waterway saw roughly 130 crossings each day.