Oil prices rebounded by more than 1% on Monday, September 28, 2026, after US President Donald Trump rejected a peace proposal from Iran. The rejection keeps geopolitical tensions high in the Middle East, with Brent crude futures rising 1.27% to $105.64 a barrel and US West Texas Intermediate increasing 0.76% to $93.11 a barrel by early morning trading in Singapore.
Impact on Middle East Export Channels
- Supply Vulnerability: President Trump’s rejection of the Iranian peace proposal and ongoing Houthi attacks on Saudi infrastructure keep critical Middle East export channels under heavy pressure.
- Refined Product Pressures: Record US diesel prices are driving inflation risks and forcing renewed market debates over potential export restrictions that could tighten European supplies.
- Export Rebound: Preliminary Kpler data shows Middle East crude exports climbed to 12.8 million barrels per day in September, driven by Saudi Arabia and the United Arab Emirates bypassing damaged Red Sea routes.
Geopolitical Standoff Over Hormuz and the UN General Assembly Peace Proposal
Iran announced a peace proposal last week transmitted via Qatari intermediaries, aimed at resolving the conflict and reopening the vital Strait of Hormuz. President Trump confirmed on Saturday that he rejected the plan. However, in a subsequent phone interview with Axios on Sunday, he indicated that US negotiators expect to engage in further talks throughout the week.
Yemen’s Saudi-led coalition announced early Saturday that it intercepted two ballistic missiles and two drones launched by the Iran-backed Houthis toward the kingdom. Analysts at ANZ noted that these ongoing strikes leave regional supply flows highly vulnerable.
Crude Flows and Refining Pressures Shape Global Balances
While crude benchmark movements show immediate sensitivity to diplomatic developments, refined products present a distinct structural challenge. Last week, Brent edged up 0.4%, but WTI dropped 7.9% amid market concerns that Washington might implement diesel export bans to cool record domestic prices. Such a move risks curbing US refining output and tightening supplies internationally.
“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 wrote in a note to clients. Any restriction on American diesel exports would shift pressure directly onto European markets, which rely heavily on transatlantic shipments.
Middle East Production Recovers via Alternate Routes
Despite ongoing security threats in the region, physical crude exports from key Middle East producers rebounded in September to 12.8 million barrels per day. This marks the highest volume recorded since the war started in February, according to preliminary Kpler shipping data released on Monday.
The export recovery was underpinned by a resurgence in shipments moving through the Strait of Hormuz, which are projected to hit approximately 7.4 million barrels per day this month. To maintain these volumes, Saudi Arabia successfully diverted shipments away from its damaged Red Sea port of Yanbu, funneling them instead through its eastern Ras Tanura terminal following attacks on the East-West pipeline.
| Indicator | Current Price / Volume | Period Change |
|---|---|---|
| Brent Crude Futures | $105.64 / barrel | +1.27% ($1.32) |
| US WTI Crude | $93.11 / barrel | +0.76% ($0.70) |
| Middle East Crude Exports | 12.8 million bpd | Highest since Feb war start |
| Strait of Hormuz Shipments | 7.4 million bpd | Estimated September volume |
Market Trajectory and Near-Term Outlook
As negotiations are anticipated to resume this week between US and Iranian intermediaries, energy traders continue to weigh diplomatic headlines against physical supply fundamentals. With producers successfully routing barrels away from damaged maritime chokepoints, immediate export volumes have proven resilient.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
