Trump dismisses Iran’s offer; oil prices rise as Hormuz closure persists

DUBAI/WASHINGTON – US President Donald Trump’s swift rejection of Iran’s response to a US peace proposal pushed oil prices higher on May 11, fuelling concerns that the 10-week-old conflict will drag on and continue to paralyse shipping through the Strait of Hormuz.

Days after Washington floated an offer aimed at re-opening negotiations, Iran on May 10 released a response focused on ending the war on all fronts, especially Lebanon, where US ally Israel is fighting Iran-backed Hezbollah militants.

Tehran also demanded compensation for war damage, emphasised its sovereignty over the Strait of Hormuz, and called on the US to end its naval blockade, guarantee no further attacks, lift sanctions and remove a ban on Iranian oil sales.

Within hours, Mr Trump dismissed the proposal in a social media post.

“I don’t like it – TOTALLY UNACCEPTABLE,” he wrote on Truth Social, without giving further details.

The US had proposed an end to fighting before starting talks on more contentious issues, including Iran’s nuclear programme.

Tehran responded on May 11 by defending its stance.

“Our demand is legitimate: Demanding an end to the war, lifting the (US) blockade and piracy, and releasing Iranian assets that have been unjustly frozen in banks due to US pressure,” Foreign Ministry spokesperson Esmaeil Baghaei said.

“Safe passage through the Strait of Hormuz and establishing security in the region and Lebanon were other demands of Iran, which are considered a generous and responsible offer for regional security.”

Oil prices surged by US$4 a barrel on May 11 before slipping back slightly, as the deadlock left the Strait of Hormuz largely closed. Before the war began on Feb 28, the narrow waterway carried one-fifth of the world’s oil and liquefied natural gas flows, and has since become a central pressure point in the conflict.

Trickle of shipping

Traffic through the strait is at a trickle compared with before the war. Shipping data on Kpler and LSEG showed three tankers laden with crude exited the waterway last week, with trackers switched off to avoid Iranian attack.

Sporadic flare-ups around the strait in recent days have tested a ceasefire that has paused all-out warfare since it took effect in early April.

In the US, surveys show that the war is unpopular with voters facing sharply higher petrol prices less than six months before nationwide elections that will determine whether Mr Trump’s Republican Party retains control of Congress.

Washington has also struggled to build international support, with NATO allies refusing to send ships to reopen the waterway without a full peace deal and an internationally mandated mission.

Mr Hakan Fidan, the Foreign Minister of Turkey, which has been in close contact with the US, Iran and mediator Pakistan since the start of the war, will visit Qatar on May 12 for talks on the conflict and on ensuring navigational safety in the strait, a Turkish diplomatic source said on May 11.

Trump set to discuss Iran in Beijing

The next diplomatic or military steps remain unclear.

Mr Trump is set to arrive in Beijing on May 13, where Iran is set to be among the topics discussed in a summit with Chinese President Xi Jinping as pressure mounts to end the conflict and the energy crisis it has triggered.

Mr Trump has been leaning on China to use its influence to push Tehran towards ​a deal with Washington.

Mr Baghaei suggested that China could instead use the visit to push back against US goals in the Gulf.

“Our Chinese friends know very well how to use these opportunities to warn about the consequences of the US’ illegal and bullying actions on regional peace and security,” he said.

Addressing whether combat operations against Iran were over, Mr Trump said in remarks aired on May 10: “They are defeated, but that doesn’t mean they are done.”

Israeli Prime Minister Benjamin Netanyahu said the war was not over because there was “more work to be done” to remove enriched uranium from Iran, dismantle enrichment sites and address Iran’s proxies and ballistic missile capabilities.

Mr Netanyahu told CBS News’ 60 Minutes that the preferred route was diplomacy, but he did not rule out the use of force.

Iran’s President Masoud Pezeshkian said in a social media post that Iran would “never bow down to the enemy” and would “defend national interests with strength”.

Despite the ongoing diplomatic efforts, risks to shipping lanes and regional economies remain high.

On May 10, the United Arab Emirates said it intercepted two drones coming from Iran, while Qatar condemned a drone attack on a cargo ship coming in its waters. Kuwait said its air defences had dealt with hostile drones entering its airspace.

Clashes have also continued in southern Lebanon between Israel and Hezbollah despite a US-brokered ceasefire there announced on April 16. REUTERS