Oil Prices Spike As Trump Rejects Iran Truce Offer: Brent Back Above $106 A Barrel

Hong Kong, September 29, 2026 — Oil prices spiked with bond yields Monday as Donald Trump's rejection of an Iranian offer of a seven-day truce stoked inflation concerns, while stocks were mixed as traders look ahead to the release of key US data.

🌏 The Iran Truce Proposal

Tehran last week set out a plan at the UN General Assembly for a halt in hostilities that would see the Strait of Hormuz reopened, which would ease a crippling supply crisis that has jacked up costs around the world.

The waterway is key to the world's energy supply and is now central to the conflict between the US and Iran, particularly with Houthis seizing Yemen's entire Red Sea coast, including the Bab al-Mandab Strait, a vital shipping lane.

💬 Trump's Rejection

However, the US president told reporters outside the White House: “I reject their proposal.”

Still, he told Axios that he expects negotiations to resume:

💬 “They want to make a deal, but it is not the deal that I want to make. It is what we would have maybe agreed to a year ago.”

💬 “They overplayed their hand,” Trump added, in the interview published Sunday.

Citing sources familiar with the matter, Axios reported that indirect talks between Washington and Tehran could take place as early as Monday.

📊 Oil Price Movements

• ⛽ Brent crude: back above $106 a barrel
• ⛽ Previous session: prices fell more than 2% Friday on news of the truce offer
• ⛽ Monday rebound: prices bounced back at the start of the new week

💰 Bond Yields At 2007 Levels

Bond yields climbed, with the average on a gauge of world bonds topping four percent last week for the first time since 2007, according to Bloomberg. The rise in prices puts the focus back on the Federal Reserve ahead of its next policy meeting at the end of October.

💼 Iran's Conditions For Reopening Strait

Iran was still standing by its conditions for reopening the Strait of Hormuz, including:

• 🇮🇷 Release of frozen Iranian assets
• 🇮🇷 Lifting of sanctions on Iranian oil
• 🇮🇷 End to the US naval blockade

🌏 Global Stock Market Impact

The oil price spike and inflation concerns weighed on stock markets:

• 🇰🇷 Seoul: shed more than 2% (reopening after a long break)
• 🇯🇵 Tokyo, Shanghai, Manila, Bangkok, Jakarta: all dropped
• 🇭🇰 Hong Kong, Sydney, Singapore, Wellington: gains

🇧🇩 Impact On Bangladesh

The oil price spike has direct implications for Bangladesh:

• ⛽ Fuel import bill — higher oil prices increase Bangladesh's import costs
• ⛽ Subsidy burden — the Tk 480 billion FY27 power-energy subsidy could increase further
• ⛽ Inflation pressure — higher oil prices feed through to transport and production costs
• ⛽ LNG prices — oil and LNG prices are correlated, affecting Bangladesh's LNG imports
• ⛽ Export competitiveness — higher energy costs reduce RMG sector margins
• ⛽ Remittance flow — Middle East conflict could affect Bangladeshi workers in the region

📜 Looking Ahead

With indirect talks potentially resuming and Trump indicating he expects a deal eventually, the oil market remains in a state of heightened uncertainty. The key variables to watch:

• 📝 Whether indirect US-Iran talks produce progress
• 📝 Whether the Strait of Hormuz remains closed or partially operational
• 📝 OPEC+ production decisions in response to price levels
• 📝 Federal Reserve's October policy meeting response to inflation
• 📝 Bangladesh government's response — whether further fuel price adjustments are needed

For Bangladesh, sustained oil prices above $106 per barrel would put continued pressure on the already-strained fiscal position — with the IMF credit programme negotiation specifically targeting power-energy subsidy rationalisation as a key reform condition.