Brent Tops $111 as Iran's Hormuz Proposal Fails to Break Deadlock With Washington

Iran has offered to reopen the Strait of Hormuz in exchange for a U.S. end to its blockade and the suspension of nuclear talks, but oil markets kept climbing on Tuesday after a U.S. official said President Donald Trump was dissatisfied with the terms, leaving the standoff unresolved. Brent June futures rose 3.1 percent to $111.60 a barrel by 13:36 GMT, according to Reuters, while West Texas Intermediate climbed 3.7 percent to $100.09 — signs that traders saw no resolution on the horizon.

The Details

Iran's proposal, outlined by Iranian foreign minister Abbas Araghchi and reported by Fortune and the Associated Press, would restore transit through the Strait of Hormuz contingent on two conditions: the United States lifts its naval blockade and ends its war with Iran, and discussions about Iran's nuclear program are deferred to a later phase of negotiations.

The offer did not move markets in Tehran's favor. A U.S. official described Trump as unhappy with the proposal, Reuters reported, leaving the conflict deadlocked and the strait largely closed. Secretary of State Marco Rubio, in a Fox News interview cited by CNBC, rejected the premise of Iran exercising any gating authority over the waterway. "Those are international waterways. They cannot normalize, nor can we tolerate them trying to normalize, a system in which the Iranians decide who gets to use an international waterway and how much you have to pay them to use it," Rubio said.

Ship-tracking data monitored by Windward, cited by Al Jazeera, showed only eight vessels crossed the Strait of Hormuz on Sunday, down sharply from 19 the previous day. The reduction illustrated the physical effect of the standoff on maritime traffic through a chokepoint that Bloomberg and CNBC both described as carrying roughly one-fifth of global traded oil and gas in normal operating conditions.

Brent crude had already crossed $110 on Sunday night. Bloomberg reported that oil climbed above that threshold by 22:07 GMT on April 27 as traders awaited a U.S. response to the Iranian offer. Al Jazeera's market update at 07:30 GMT on Tuesday placed Brent at $111.49, and the Reuters reading at 13:36 GMT showed the benchmark had nudged further to $111.60 — a cumulative 3.1 percent gain on the day for Brent, with WTI making a steeper 3.7 percent climb to cross $100 for the first time in this cycle.

Jorge Leon, an analyst at Rystad Energy, told Reuters that the move reflected something broader than a single day's headline. "Oil above $110 per barrel reflects a market that is rapidly repricing geopolitical risk," Leon said.

Context

The Strait of Hormuz had been operating at a fraction of its normal capacity since the start of the U.S.-Israeli war on Iran on February 28, Reuters reported. In the period before the conflict began, between roughly 125 and 140 vessels transited the strait daily, according to Reuters. By Sunday, Windward data cited by Al Jazeera recorded only eight crossings — a reduction of more than 90 percent from pre-war daily averages.

The strait's strategic importance is well established. Bloomberg and CNBC both noted that approximately one-fifth of globally traded oil and gas passes through the waterway in normal conditions,

Iran's conditional offer to reopen the waterway — contingent on an end to the blockade and a deferral of nuclear talks — left the nuclear issue unresolved, consistent with reporting that the proposal postponed those discussions to a later stage.

What's Next

Reuters reported the current U.S. position as one of dissatisfaction, with no indication from the U.S. official cited that a revised offer was under consideration. Rubio's comments to Fox News, cited by CNBC, suggested the administration was unwilling to accept any framework that grants Iran effective authority over Hormuz transit.

Rystad Energy analyst Jorge Leon told Reuters that the pricing reflects the market actively adjusting to geopolitical risk as the strait remains largely closed and talks remain stalled.