• President Trump rejects Iran's latest offer in ongoing negotiations to end hostilities and reopen diplomatic channels.
  • The rebuke adds uncertainty to oil markets already on edge over potential disruptions in the Strait of Hormuz.
  • Talks remain at an impasse as both sides dig in on core demands, with no breakthrough in sight.

A Sharp Rebuke

President Donald Trump on Thursday dismissed Iran's latest proposal as a "stupid proposal," according to a person familiar with the matter, dealing a blow to efforts to de-escalate tensions and resume trade through the vital Strait of Hormuz. The comment came as negotiations in recent weeks had shown signs of incremental progress, with both sides exchanging confidence-building measures.

“It’s a stupid proposal,” Trump said in a brief exchange with reporters, without providing further detail. The White House did not immediately respond to a request for elaboration. Iran's foreign ministry could not be reached for comment.

Oil Markets on Edge

The rejection jolted energy markets already sensitive to any shift in the standoff. Brent crude futures rose 1.8% on the news, reversing earlier losses, as traders weighed the risk of renewed confrontation. The Strait of Hormuz, through which about a fifth of the world's oil passes, remains a flashpoint; Iran has previously threatened to restrict shipping if its terms are not met.

“Every step backward in these talks amplifies the risk premium in oil,” said an analyst at a London-based energy consultancy. “Without a deal, we could see renewed volatility.”

Sticking Points

The US has maintained red lines on nuclear containment and maritime security, while Iran seeks sanctions relief and guarantees for shipping lanes. The latest proposal—details of which remain under wraps—reportedly included phased caps on enrichment in exchange for easing of some restrictions. Trump’s blunt assessment suggests it fell short of US demands.

Negotiations have been fragile since the collapse of earlier frameworks in the 2010s. Previous interim deals unraveled amid disputes over verification and regional guarantees. Both sides have since hardened positions, with Trump’s administration pushing for a broader bargain that includes limits on Iran's ballistic missile program.

Limited Room for Compromise

European and Gulf allies have been watching warily, urging restraint while positioning for any outcome. Public opinion in both the US and Iran remains skeptical, with critics on each side arguing the other cannot be trusted. Without a shift in postures, the path to a durable settlement appears narrow.

Correction: An earlier version of this article mischaracterized the timing of Trump's statement. It was made Thursday, not Wednesday.