Oil up, Wall Street dips after Trump rejects Iran truce offer
- Last updated: September 28, 2026 | 19:03
Oil futures surged more than four percent before retreating from their latest peak on Monday, alongside gains for natural gas and diesel prices, after US President Donald Trump rejected Iran's offer of a seven-day truce.
High inflation concerns lifted government bond yields as markets bet on the US Federal Reserve hiking interest rates in October after already tightening this month, supporting the dollar.
Wall Street indices nonetheless began the session in the red with the Dow, the broader-based S&P 500 and the tech-heavy Nasdaq off around half of one percent half an hour into trading.
European stock markets conversely were ahead with London, Frankfurt and Paris adding some 0.6 per cent two hours from the close, after a mixed showing across Asia, with markets also reacting to Washington and Beijing extending their trade truce at the end of last week.
"There was renewed strength in oil prices after comments from President Trump that he had rejected Iran's latest proposal to reopen the Strait of Hormuz," noted AJ Bell investment director Russ Mould.
International benchmark Brent crude was up 2.2 per cent at $106.60 per barrel around 1400 GMT with West Texas Intermediate adding 2.0 per cent to $94.33 per barrel.
With no sign of an imminent end to the war pitting the United States and Israel against Iran, European natural gas prices also rose on Monday, while average diesel prices in the United Kingdom hit a record high just shy of two pounds per litre, according to the RAC motoring organisation.
The price of diesel at the pump in the United Kingdom has hit record highs due to the US-Israeli war on Iran, the motoring body RAC said in a release on Monday.
As well as hitting motorists' pockets, high diesel costs are adding to logistical and transport costs for a vast array of goods, as the fuel is widely used in industry and agriculture.
The cost of a litre of diesel is now 199.18 pence and the cost of filling up an average family car is now almost £110, £31 more than before the conflict began, Simon Williams, the RAC's head of policy, said in the release.
The price high on Monday eclipsed the previous highest price of 199.09 pence in June 2022, during the acute energy market shock in the aftermath of Russia's full-scale invasion of Ukraine.
"Only a sustained lower oil price - over several weeks, not days - will lead to cheaper prices at the pumps ... the government could take steps to ease the burden on drivers by lowering fuel duty further or reducing VAT," Williams said.
On the downside, "gold prices have slumped from their summer highs as investors have reacted to the stronger dollar — which makes the metal more expensive for non-dollar buyers", Mould explained.
Iran set out a plan at the United Nations General Assembly last week for a halt in hostilities that would see the Strait of Hormuz reopened, easing a crippling energy supply crisis that has jacked up global costs.
The waterway is key to the world's oil and gas deliveries and is now central to the conflict between the US and Iran, particularly with the Iran-backed Houthis seizing Yemen's entire Red Sea coast, including the Bab Al Mandab Strait, a vital shipping lane.
Iran was standing by its conditions for reopening the Strait, including the release of frozen assets, the lifting of sanctions on its oil and an end to the United States' naval blockade.
Agence France-Presse / Reuters