Trump rejects Iran peace proposal, oil prices surge, dragging down U.S. airline stocks

Investing.com - On Monday, U.S. President Donald Trump dismissed Iran’s latest response to the U.S. peace proposal as “completely unacceptable.” Once the news broke, oil prices surged sharply, and U.S. airline stocks declined in pre-market trading, as investors grew more concerned about the prospect of a prolonged supply disruption.

At 5:14 a.m. Eastern Time (17:14 Beijing Time), Brent crude futures rose 2.7%, trading at $104.02 per barrel; West Texas Intermediate (WTI) increased 2.3%, trading at $97.55 per barrel. The Strait of Hormuz remains largely closed, and global oil supply remains tight.

As a result, Southwest Airlines and United Airlines’ pre-market stock prices both fell by 1%, while Delta Air Lines and American Airlines each declined by 0.8%.

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This oil price increase essentially offset last week’s decline. Last week, both major crude benchmarks fell about 6% collectively, as markets anticipated that the ongoing 10-week conflict might soon end and that Strait shipping could resume.

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However, this hope was quickly dashed. Iran’s counterproposal announced on Sunday far exceeded the limited ceasefire framework proposed by the U.S., with Tehran demanding a broader regional ceasefire—including Lebanon, where U.S. allies Israel are fighting against Iran-backed Hezbollah.

According to Iranian official media and semi-official Tasnim News Agency, Iran also put forward a series of additional conditions: demanding compensation for war damages, lifting the U.S. maritime blockade, securing security guarantees against further strikes, lifting sanctions, and removing restrictions on Iran’s oil exports. Tehran also emphasized its sovereignty over the Strait of Hormuz.

Trump swiftly rejected this, writing on Truth Social: “I don’t like this proposal—completely unacceptable.”

Previously, Washington’s proposal was to first achieve a ceasefire, then gradually negotiate more complex issues, including Iran’s nuclear program.

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