Oil Jumps Over 3% — Trump Rejects Iran’s Response, Markets Volatile

President Donald Trump’s public rejection of Iran’s response to a U.S. peace proposal sent fresh waves of uncertainty through energy markets. Trump described Tehran’s reply as “totally unacceptable” on May 10, 2026, a move that revived fears the fragile diplomatic track could collapse and military pressure might return.

Iran conveyed its response via Pakistani mediators, emphasizing an end to hostilities and guarantees against renewed attacks, while rejecting some U.S. demands. Washington’s swift dismissal of Tehran’s positions amplified short-term risk sentiment among traders, increasing the chance of supply-disruption premia in crude markets.

Markets reacted quickly: Brent and U.S. crude futures surged intraday, with Brent rising as much as 3% during sessions amid renewed U.S.-Iran exchanges and concerns over the Strait of Hormuz; Reuters reported Brent intraday gains near 3% before settling around $101.29 a barrel. That move reflected a re-pricing of geopolitical risk after a period of tentative optimism.

In a broader context, disruptions to shipping through the Strait of Hormuz and episodic naval clashes have become primary drivers of oil volatility, and recent reporting has flagged large trade flows placed ahead of key announcements as attracting regulatory scrutiny. Those factors complicate market liquidity and can magnify price swings in response to political statements.

Analysts say oil is likely to remain sensitive to headlines: a clear diplomatic breakthrough or a confirmed reopening of shipping lanes would ease pressure, while further rejections or kinetic escalation could push benchmarks higher. Market participants should monitor diplomatic channels, naval incidents in the Gulf and official inventory releases to gauge the next price direction.