Iran rejects ceasefire, reviews US peace plan as markets worry

Iran’s leadership publicly rejected an immediate ceasefire while saying it would examine a U.S. peace proposal, a stance that has recalibrated geopolitical risk pricing across global markets.

The situation unfolded rapidly: diplomatic contacts and shuttle diplomacy continued amid statements from Tehran that it will not accept a truce until strikes subside. In parallel, the International Energy Agency (IEA) coordinated an unprecedented release of 400 million barrels from strategic reserves to ease acute market tightness stemming from disruptions in Gulf oil flows.

Market effects were immediate. Brent crude climbed above $100 a barrel at points as shipping disruptions and attacks on energy infrastructure tightened physical balances; the IEA intervention and other releases helped temper prices but volatility remained elevated. Rising energy costs fed through to inflation expectations and logistics bottlenecks increased input costs for manufacturers and transporters.

Supply-chain stress has been most visible in freight and energy-dependent sectors, where rerouting, insurance costs and port congestion have raised operational expenses and delivery times. The effective disruption of transit through the Strait of Hormuz magnified these effects, prompting companies to reassess inventory policies and suppliers.

Economists and major banks have revised downside growth risks higher. Notably, Goldman Sachs raised the near-term probability of a U.S. recession amid weaker payroll data and the inflationary shock from higher oil — a shift that could tighten financial conditions and dampen consumer spending if energy pressures persist.

For investors the outlook is one of continued elevated volatility: energy supply dynamics and central-bank responses to any sustained inflation uptick will be decisive. Market participants should monitor corporate margin commentary on energy pass-through, shipping and insurance costs, and any diplomatic breakthroughs that could reopen Gulf shipping lanes and ease the immediate supply-tightness premium.