Oil prices rebound as U.S.-Iran deal stalls over Trump's tougher demands

Monday 01 June 2026 - 07:58

By: Dakir Madiha

Oil prices rebound as U.S.-Iran deal stalls over Trump's tougher demands

Oil prices surged at the start of the week after hopes for a swift ceasefire agreement between the United States and Iran collapsed, with last-minute demands from President Trump pushing negotiations into a new phase of uncertainty. The reversal caught energy markets off guard, as traders had spent weeks pricing in the prospect of a deal that would reopen the Strait of Hormuz to unrestricted shipping.

Brent crude climbed after closing near 92 dollars per barrel on Friday, as traders reassessed their expectations following a weekend without a breakthrough. The international benchmark had fallen roughly 20 percent from its 2026 highs in recent weeks, driven by growing optimism over a ceasefire extension that would lift restrictions on one of the world's most critical energy corridors. That optimism evaporated over the weekend as it became clear that no agreement had been reached.

The impasse traces back to Friday, when Trump convened his national security team in the White House Situation Room to make what he described as a final decision on a proposed memorandum of understanding. He left without announcing one. According to reports, Trump instead sent back a revised framework with stricter conditions, particularly regarding the handling of Iran's enriched uranium stockpile. A senior U.S. official indicated that an agreement remained likely but that the timing was uncertain, and that Iran might need up to three days to respond due to logistical challenges in transmitting documents to Tehran. The draft memorandum, which negotiators had largely agreed upon earlier in the week, included provisions to extend the current ceasefire by 60 days, reopen the Strait of Hormuz within 30 days following demining operations, lift the U.S. naval blockade on Iranian ports, and open formal negotiations on the nuclear program. Major sticking points remain, however, over sanctions relief, the release of approximately 24 billion dollars in frozen Iranian assets, and uranium enrichment.

Iran showed no sign of softening its position. The country's chief negotiator and parliament speaker Mohammad Baqer Qalibaf signaled that Tehran would not yield, writing on social media that the Islamic Republic would secure its rights not through dialogue but through its own means, and that Iran places trust in actions rather than guarantees. He had previously told Pakistani army chief Asim Munir that the United States lacked sincerity in the negotiations and that Iran would not compromise on its national rights. Vice President JD Vance, who leads the U.S. diplomatic team, acknowledged that disagreements persist, telling reporters that the two sides were still working through specific points of language and that the nuclear question remained under negotiation.

The standoff injected fresh uncertainty into energy markets that had already priced in a deal. Brent had fallen nearly 19 percent over the month of May, its steepest monthly decline since the onset of the Covid-19 pandemic, on the back of ceasefire optimism. With roughly 20 percent of the world's daily energy supply transiting the Strait of Hormuz, any delay in reopening that chokepoint keeps upward pressure on prices. Bob Parker, senior adviser at the International Capital Market Association, told CNBC that oil prices were likely to remain between 90 and 100 dollars per barrel for at least the next two months, until the prospect of a durable peace agreement becomes clearer.