Oil prices edged higher in Asian trade on Monday after U.S. President Donald Trump rejected Iran’s conditions for ending the war in the Middle East, sparking fresh fears of prolonged tension and possible disruption to global oil supplies.
The development rattled markets and investors were watching potential impact of the conflict on shipments through the Strait of Hormuz, a key route for global crude oil shipments, it was said.
Trump’s dismissal of Iran’s response to his latest peace offer raised worries that the crisis would continue, rather than rapidly de-escalate.
Trump, due in China this week where the Middle East conflict is expected to be a major topic of discussion, strongly criticised Iran’s stance.
I just read the answer of the so-called “Representatives” of Iran. “I don’t like it — TOTALLY UNACCEPTABLE!”
But Iranian President Masoud Pezeshkian said Tehran would not agree to any arrangement that seemed to weaken its position.
“We will never surrender to the enemy,” he wrote on X on Sunday. “If there is talk of dialogue or negotiation, it does not mean surrender or retreat.”
The exchange further muddied hopes for a quick resolution to the crisis.
The analyst told AFP the deepening rift between Washington and Tehran had increased the danger of ongoing volatility in the oil market.
Trump’s response showed the two sides were still far apart, said Lloyd Chan of Japanese bank MUFG.
President Trump’s quick dismissal of the counter-demands “highlights the deep divide on both sides and points to the potential for prolonged uncertainty rather than rapid de-escalation,” he said.
“For oil markets this signals a permanent geopolitical risk premium while Hormuz disruptions endure,” Chan added.
Traders have been worried about the Strait of Hormuz, where any upset could impact supply of crude and push prices higher.
Asian Stocks Diverge
Asian shares were mixed on Monday, May 11, 2026, as investors weighed the impact of the Middle East crisis and developments in technology shares and trade diplomacy.
Japan’s Nikkei 225 slipped 0.36 percent to 62,486.84. Hong Kong’s Hang Seng Index dropped 0.34 percent to 26,303.16.
The Shanghai Composite Index added 0.89 percent to 4,216.96.
The KOSPI in South Korea rose four per cent, buoyed by a strong performance in technology stocks.
Shares of Japanese gaming giant Nintendo fell nearly 10 percent in Tokyo on Friday after the company warned of lower profits this year and said it would raise the price of its Switch 2 console.
United States Treasury Secretary Scott Bessent was to visit Japan and South Korea before heading to China for Trump’s high-stakes summit with Chinese President Xi Jinping.
The summit will be held from Wednesday to Friday, Beijing said on Monday.
Bessent was due to meet Prime Minister Sanae Takaichi in Japan on Tuesday, with talks likely to cover Japan’s reported recent market interventions to support the yen.
US Treasury Secretary said he would meet Chinese Vice Premier He Lifeng in Seoul.
“Economic security is national security,” Bessent wrote on 𝕏.
Trump and Xi agreed to a year-long trade truce in October during talks in South Korea after Washington and Beijing imposed tit-for-tat tariffs on each other’s exports a year ago.
Market Data
Brent North Sea crude was up 4.75 per cent to $99.95 a barrel at about 0330 GMT. West Texas Intermediate was up 4.16 per cent at $105.50 a barrel.
The euro fell to $1.1758 from $1.1779 on Friday. The pound was lower at $1.3592 from $1.3625.
The dollar rose to 157.14 yen from 156.76 yen and the euro edged higher against the pound to 86.50 pence from 86.45 pence.
In New York, the Dow finished flat at 49,609.16.
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